The Value Added Tax (VAT) on health services and private education will be reduced to 10 % of the final value reports the local press (Shqip, 18.09.2009). Actually VAT in Albania stands at 20 % for every single article or service billed by VAT-collected enterprises. And in fact VAT is not collected from all enterprises. To date, only small enterprises that have a global yearly turnover lower than 8 million Albanian Lek (ALL), are not asked to pay VAT for their sales or services. But in turn, the VAT they paid in order to get articles or services which these enterprises transformed or stored with the goal of selling them to the final customer are not reimbursed. The introduction of VAT in education seems to be a recent policy. According to Ilir Beqja, economist and opposition party member, it was introduced in 2007, (Ora News, 20.09.2009).
Upgrading of businesses
As the government has prepared a draft-project on the reduction of the VAT tax on health and education sales or services, earlier reports from the press reported that the government wants to lower the small-company qualification quotas. From under 8 million ALL to date (nearly 59000 Euros), the roof is expected to fall to 4 million ALL (nearly 29000 Euros) or 5 million ALL (nearly 37000 Euros). This will almost divide by two the roof. It will cause more enterprises to be qualified as mid-sized and will throw them into the group of VAT-collected enterprises. Only companies making an annual turnover of less than 4 million ALL will be qualified for small-enterprise advantages (or disadvantages).
Beneficiaries of 10 % VAT
The first private hospitals that have been created during recent years, as well as the laboratories that make medical analyses and have a turnover of over 4 million ALL a year are expected to profit from the reduction of VAT. But the most important benefit is expected to land on private schools and universities, asserts Gjergj Erebara (Shqip, 18.09.2009). The business editor of the daily assesses that during recent years an educational market with a yearly global turnover of tens of millions of Euros has been created in Albania. They suggest that private universities offer many possibilities for every one against payment, while state universities have limited entry quotas. Gjergj Erebara recalls that public universities have asked their hierarchy for liberalization of student admission policies and quotas. As well, they have asked for payment liberalities to be installed to benefit the development of the public universities.
