Parliamentary Committee of Economy and Finance approved on Monday reduction of VAT on hospitality businesses in the sector of tourism from 20 percent to 6 percent. In 2016 revenues from tourism in our country hit a record of EUR 1.5 bn, according to Bank of Albania.

Meanwhile, citing the Statistics Institute (INSTAT) during 2016 our country was visited by 4.7 mln passengers marking a rise of 15% in comparison to the previous years.

Minister of Finance, present in the meeting of parliamentary committee, said that VAT cutting in the sector of tourism will lead to formalization of this sector.

Reduction of VAT rate is expected to have an impact on increase of tourists in the country. The negative effects as a result of the VAT rate reduction, according to Ahmetaj, will be offset by increase of taxable base.

Meanwhile the business community has endorsed the government initiative for reduction of VAT from 20 to 6 percent on hospitality businesses in the sector of tourism. At a joint news conference held early this month, the heads of business associations operating in the market have unanimously welcomed this initiative as very important for development of this sector.

According to them, VAT reduction to the rate of 6 percent will boost investments in this sector as well as improve the service to consumer and increase employment.

Zak Topuzi, the head of hotels-tourism association, said that this govt. move will benefit around 3900 hospitality businesses, including hotels, motels and inns. According to him, the high taxes have hampered investment growth in this sector. Source: ATA