Albania Suggests Reduction of VAT in 54 Basic Foods to 6%

The package also includes increasing the standard VAT rate for goods outside the food basket from 20% to 21%. The government has stated this increase as a compensation for the reduction in VAT on basic foods, while prices for other products could rise. The date of entry into force of the regulation has not been announced in the sources; the package will first be submitted to the government's approval, then to parliament.

A finance expert, Eduart Gjokutaj, says that prices are not solely determined by the VAT rate; they are also influenced by purchase price, transport, energy, financing, and competitive costs. According to Gjokutaj, food prices could fall by at most 7-8 per cent. Edvin Prençe, President of ProEksport Albania, argues that the package has not been sufficiently consulted. There is also a warning that reducing the VAT implementation threshold for businesses from 10 million leks to 5 million leks could encourage tax avoidance.