Parliament due to discuss draft reducing VAT on tourism facilities – Impact on prices set to be substantial

Tourism sector has received in recent years, a special attention by the Albanian government, as one of the priority sectors in the country’s economic development.

The government intended to establish Albania as a preferred destination in the Mediterranean offer of international tourist markets, creating a new image for tourism in Albania and offering services according to international standards.

So the government’s decision to reduce VAT for hotels has arrived in Parliament where it will be discussed in parliamentary committees.

The data on the number of visitors over the last four years (2013 – 2016) have shown that Albania is on the right track.

In the period 2013-2016 there was an increase of 45.4% in the number of foreign nationals entering the country.

For this reason, in order to offer incentives in this sector, lowering the tax burden only for accommodation facilities, pursuant to legislation in the field of tourism, will bring positive effects, namely, improving service and quality, and it will also boost the number of tourists, create new jobs, etc.

This bill has a negative impact on the state budget revenues in the section “Income from VAT”, but that is expected to bring a positive impact in the increase of revenues from the development of tourism sector.

Because tourism sector includes a range of services, in addition to hotels, for example, restaurants or other similar services, the calculation of the effect is approximate.

Calculations show that the negative effect on the budget would be roughly around ALL 1.1 billion, considering VAT tax collected from the tourism sector operators in 2016.

According to statistics from the Hoteliers Association, this decision will benefit 3,900 accommodation units, including hotels, motels and accommodation houses.

Presently, the country boasts an accommodation capacity of 60 thousand beds.

SCAN

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