Food prices, experts: the highest VAT in Europe

Gjergj Filipi of the Agenda Institute says that the government has all the possibilities to soften the cost of living, at least for the food products.

“This can be done by lowering the VAT for these products, so that the globally raised prices and the devaluation of the Albanian currency should not be felt only by the pockets of the citizens. The government should hold one part of this responsibility”, Filipi said.

For every product that the citizen buys, 20% of the price goes to the state as Value Added Tax. Albania is almost a unique country with such a high VAT tax, because in other countries it is much lower

“All EU countries have different levels for the vital basic products. The governments put less taxes for the food products”, Filipi declared.

Albania, which pretends to be the country with the lowest fiscal burden in Europe, has the VAT tax four times higher than the European countries that are considered as countries with high level of taxes.

”The VAT on food products should be immediately reviewed. If VAT will be decreased, the income of the state will not be reduced. Because if VAT would be cut in half, people would consume more food products in the market”, Filipi declared.

In 2010, the government took from the citizens 17.5 billion ALL only from VAT on food products, which is 75% more than in 2006. The fiscal burden is one of the reasons why Albania, according to Eurostat, is a country with the highest prices in the region, although it has a lower purchasing power. In 2010, food princes in Albania were 70% higher than the average in EU countries. For Macedonia, this indicator was 52%, for Bulgaria 67% and for Romania and Serbia respectively 65 and 69%. This year saw a price increase even on medical products, after the government raised the VAT at 10%.

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