Albanian Government Lowers Tourism VAT to 6% – Saves $2m for Hotels

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Tirana, Albania | Tirana Echo – Albania’s government has lowered the VAT for tourist accommodation facilities from 20% to 6%, a drastic last minute decision to help hotels offering accommodation during the touristic season.

Experts at the Ministry of Finance say the decrease of the accommodation VAT will help the tourist industry by easing hotels by as much as $2 million USD while helping the formalization of this important sector of Albania’s economy.

Albania has been highly noncompetitive in the region with a much higher VAT for tourist accommodation than its neighbors. In Macedonia VAT stands at 5% while in Montenegro at 7%. Even in lucrative Croatia which boasts a consolidated tourism sector, its authorities tax accommodation at 13%, compared with the general VAT at 25%.

Albania’s government hopes the decision to lower accommodation VAT will give a boost to the country’s tourism industry, which has seen growing numbers in recent years with growing interest and demand for Albania as a tourist destination.

Albania is well situated in the Mediterranean basin and counts around 4m tourists per year, with a positive growing trend. However, the country suffers from lack of adequate infrastructure, few low-cost airlines flying into the country and poor hotel capacities which lag behind its neighboring countries Montenegro, Macedonia, Greece and Italy.

Last week, Hungarian low cost airline Wizz Air performed the first ever low-cost flight to Albania’s international airport which will ensure a direct connection between Tirana and Budapest twice weekly, with hopes of increasing frequency.

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