Must road tax be increased in Albania?

Must road tax be increased in Albania?

IBNA Special Report

Tirana, April 10, 2015/Independent Balkan News Agency

By Edison Kurani

Price of fuel in the region has significantly gone down, but in Albania, the price is increasing. The paradox consists of the increased taxes by Albanian government and the minimum desire that merchants have to reduce the prices when they fall in the international market and the great passion that they have to increase them even if prices are gradually increasing in the foreign market. A passion that “forces” them to keep the price the same even when fuel goes down in the international market.

People say that they’re worried about these facts which for years have been part of the life of Albanians.

The number of cars increases, the possibility to move around with alternative and ecological means is still a “luxury “ option, public transport leaves much to desire, infrastructure is still weak, therefore moving around with a personal vehicle is a way stimulated by these factors.

Minister of Finance: Opposition’s populism costs 18 billion ALL or 2/3 of internal investments

In this civic debate, the intervention of the state and politics has been somehow weak. On one side, the opposition has called for the tax burden to be decreased, while the government has chosen to keep quiet.

In the recent hours, the government has been facing the opposition in parliament, to discuss its proposal of changing road tax for vehicles. Namely, the opposition has demanded a reduction by 7 ALL per liter of the road tax.

Albanian Minister of Finance, Shkelqim Cani, expressed the stance of the Albanian government in relation to this demand. He said that this is a political, populist proposal without any arguments.

“If the opposition decided to tell people through populist policies that the removal of taxes is a greater good, let it do this, turning into a regime of zero taxes that Albanians know very well”, Mr. Cani says.

Minister of Finance stops on the concrete terms of the proposal made by the opposition. He says that the Albanian government has carefully looked into the proposals that have been done.

“The proposal to reduce road tax by 7 ALL a liter has a 12 billion ALL effect on the budget. This makes up for 2/3 of the total investments with internal funds from the budget”, Cani says.

“MPs of each side, when they bring in proposals that have significant effects in revenues and as a result, on the budget, they must take into effect the finances of the country and the risk that the measures in question impose in time and on economy in general”, says the former Governor of the Bank of Albania.

Cani also says that the Albanian government has close collaboration with international institutions in order to bring Albanian economy under control. “We have the obligation to seek advice on the fiscal packages or special fiscal measures and we believe that these measures are coherent with the EU standards that you mentioned, but also with the demands of IMF and World Bank”.

How much tax do Albanians pay on fuel?

Currently, a liter of fuel costs 180 ALL in Albania, or 1,3 Euros. For each liter of diesel or petrol, there’s a 37 ALL per liter duty tax, 27 ALL road tax, 3 ALL carbon tax. Thus, taxes on diesel and petrol amount to 67 ALL per liter.

The government says that this level of taxes is fair. “We consider this tax a fair one, balancing different elements”, says minister Cani.

Mr. Cani also has a comment: “Whoever uses a car, he pays 67 ALL, while he who doesn’t use a car, pays 0 ALL”.

How are the incomes coming from these taxes managed

Mr. Cani talks about the use of these taxes: “Road users want roads and road maintenance, therefore they must pay; those who pollute environment must pay in order for the environment to be cleaned. The tax reduces the use of cars, reduces the number of accidents on the road and improves the quality of roads. Roads are equipped with new standards or other elements that relate to road signs and this has an impact on road safety”.

Petrol stations do not reflect the world market of fuels

In the international market, the price of an oil barrel changes frequently. For more than a year, there has been a dropping tendency. In the Albanian market, this change was very little reflected.

On the media and public opinion, there’s been strong criticism on this fact.

Owners of petrol stations complain that they cannot afford the high taxes.

Minister Cani admits the lack of flexibility in the reduction of price in the domestic market of fuels, when the international market has seen a fall of the price of fuel. He says that the government has drafted a plan of measures to address this shortfall. /ibna/