The 'cheat' of the Ministry of Finance with excise duty. The reduction in the oil tax is offset by the increase in VAT

2026-04-07 09:47:40Fokus SHKRUAR NGA REDAKSIA VOX

The state budget does not lose a penny from the 20 percent reduction in the excise tax on oil when the price of a paper exceeds 220 lek. The revenue lost to the budget from the reduction in this tax is compensated by the increase in the value added tax due to the price increase.

VAT on oil in Albania is calculated at a rate of 20 percent on the final price, which includes the cost of oil, excise duty, turnover tax and carbon tax.

This means that VAT is applied as a "tax on tax", where at the current price of 224 lek set by the board, the government collects 44.8 lek per liter from this tax alone, or at least 8 lek per liter more than it collected before the fuel price increase.

The figure coincides with the excise tax reduction level of 20 percent. Currently, the excise tax applied on fuel is around 40 lek per liter, which means that its reduced level represents an additional 8 lek collected from VAT due to the price increase.

Perhaps this was the calculation made by the Ministry of Finance when it decided that the 20 percent excise tax reduction would only apply when the price of oil exceeds 220 lek. If this price increases beyond this level, the government not only does not lose from the reduced excise tax, but also collects additional revenue from VAT.

©Copyright Vox News

This article is exclusive to Vox News, and is copyrighted under Law No. 35/2016, "On Copyright and Related Rights". The article may be republished by other media only by citing Vox News and including a link to the source at the end, otherwise any violator will be held liable under Article 178 of Law No. 35/2016.


Video