VAT collection for sales in Albania drops 15%

TIRANA, Jan. 19 – Despite total budget revenues increasing by 9.5 percent during the first 11 months of 2010, some important indicators such as the value added tax on sales within the country which measures consumption registered a sharp decrease. Finance Ministry data show VAT collection on sales within the country during the January-November period 2010 dropped by 15 percent to 27 billion lek (around 270 million dollars), down from 30.4 billion lek during the same period in 2009. The situation reflects consumers’ hesitation and their saving trending at a time when unemployment is at 13.5 percent and prices have gone up on most consumer products.
Another indicator which registered a negative performance was the personal revenue tax which remained at 42.4 billion lek, exactly the same as the first 11 months of 2009 and the tax on small businesses which dropped 4 percent year-on-year.
The road circulation tax also dropped by 1.9 percent compared to 2009 while tax on sale of used cars fell by 7.2 percent.
Meanwhile, gambling seems to have soared with tax collection up 65 percent during January-November 2011. Data show the tax administration collected 4.7 billion lek in gambling taxes, up from 2.9 billion lek during the first 11 months of 2009.
The best performance was reported for excise goods with officials managing to collect 34.8 billion lek, 14 percent more than in 2009, from fuel, tobacco, alcohol, coffee etc also thanks to increased excise taxes on cigarettes and coffee since September 2009.
Finance Ministry data show total revenues at the end of November 2010 reached 293.4 billion lek while expenditure was at 316.5 billion lek significantly narrowing budget deficit also because of major budget cuts in July 2010.
Government says the tax administration faced great difficulty during 2010, collecting the same amount of taxes and 2.6 percent less than it had projected.
After moderate growth during the first half of 2010, the Albania economy returned to high growth rates in the third quarter somehow overcoming the global crisis effects present since the beginning of 2009. Latest INSTAT data show the country’s GDP in the third trimester of 2010 grew by 4.9 percent year-on-year and 1.6 percent compared to the second quarter.
Industry, transport, services, trade and agriculture were the drivers of the economic expansion while the construction and post-telecommunication continued suffering registering negative growth rates.