'VAT Reduction in Tourism Will Boost Investments'
Albanian Daily News
Published April 7, 2017

The latest government’s decision on the reduction of VAT from 20% to 6% in tourism is expected to yield its fruits directly in increase of investments, in formalizing and increase of the contribution from this sector, but even VAT revenues because of formalization of the investments.

“The recent data from the ground and the detailed statistics show that tourism has become one of the main contributors of economic growth and employment in Albania and therefore the government believes that it should be promoted with a serious fiscal facilitation from 20% to 6%,” said the minister of finance during his speech delivered in Thursday’s plenary session.

According to him, VAT reduction in the sector of tourism brings us into competitive levels with the other countries of the region, but even with the other countries that have a strong tourism industry and through this measure we intend to add a new impulse to the sector”, said he.

Likewise, the minister of finance warned that following the tax facilitation, the government will not tolerate any more informality in this sector. “After this measure there will begin a broad formalization campaign in cooperation with the tourism industry itself,” said Ahmetaj.

Last year, Albanian economy benefited 1 billion and a half Euros from tourism industry, marking in this way an historic record. “Tourism together with a light industrialization of the producing sectors will promote the Albanian economic development into another higher stage and in the second governance mandate we envisage an economic growth of 5.5% annually”, stated the minister of finance. The current 3.46% growth is not much, but it’s much better than it was in 2013”, said Ahmetaj.

Right before the start of the new tourist season, Albanian government has decided to reduce the rate to 6 percent the Value of Added Tax for accommodation facilities in the tourism sector.

“The degree of VAT reduction, which applies to the accommodation services in accommodation facilities, according to the defined categories in the tourism legislation, is 6 percent. Conditions, criteria and procedures for the implementation of this paragraph shall be determined by the decision of the Council of Ministers,” states the adopted decision.

Currently VAT for tourism sector is 20% being considered among the highest in the region.

Tour operators are constantly looking to reduce VAT, since for both hotels and restaurants it is among the highest in the region, bringing higher taxes for operators in Albania than those of the region.

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