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Ministry of Finances will not change VAT scheme for farmers

The Ministry of Finance and Economy has decided not to change the VAT scheme for farmers who seek a reduction of refundable value-added tax (VAT) to 6%.  Fiscal Policy Director at the ministry Niko Lera said in interview for Albanian Telegraphic Agency He noted that the agriculture processing companies have no additional costs from the reduction of VAT refunds because it is addressed to farmers. On the other hand, Lera said that the only sector that can be affected from the changes is dairy farming, where farmers pay VAT for part of raw material they need to buy, adding that for this category, compensation options will be considered so the money will go whereat is needed. One of options to be considered by the government is to directly refund every farmer for the amou.nl of milk they sell using invoices from the agriculture ministry structures and thereby compensate for the costs that may have been increased as a result of this scheme. But, according to farmers and agro-producers in the dairy industry, the fiscal change to reduce the amount of refundable VAT to 6% from 20% has an additional cost of abound Lek 2 billion per year. Recently, thousands of farmers, collectors and agribusiness representatives gathered in protest against the cut of refundable VAT. They said that the decision forces farmers to lower the prices of their products, at a time when competition from imports is high. If prices do not change agro-producers will be forced to raise the price of for the final products, from which they risk losing the domestic market.

SOURCE: ATA

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