Europe > Southern Europe > Albania > Albania Plans to Hike Taxes to Curb Deficit

Albania: Albania Plans to Hike Taxes to Curb Deficit

2014/11/19

Albanians face higher taxes next year as Edi Rama's centre-left government struggles to cut the budget deficit and meet the terms imposed by international lenders.

The package of tax changes presented this week in parliament shows higher duties on tobacco and petroleum products. Gain tax rate will rise from 10 to 15 %.

Revenues in 2015 are estimate to grow 370 BN lek (2.64 billion euros) to 415 billion lek, (2.96 billion euros) while expenditures will increase from 456 to to 475 billion lek. (3.26 billion Euros to 3.39 billion Euros)

Albania is struggling to cut its public deficit as envisaged by the agreement with the International Monetary Fund. Albania's current deficit is equivalent to 71 % of GDP, the highest deficit t0 GPD ratio in the Balkans.

In addition to paying higher taxes, Albanians can expect to pay additional for their electricity in 2015.

Some businesses however will enjoy tax breaks. Producers and importers of energy drinks will be saved from the excise business imposed on them last year. The government's explanation sent to parliament states that this business had been almost impossible to collect and had damaged local producers.

The major chromium refinery in Albania will enjoy a 33 % cut on royalty fees, justified as a measure needed to boost domestic production. The government intends as well to allow the fishing industry to use untaxed fuel for its fleet for the same reasons.

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