Businesses estimated that the value-added tax (VAT) at the level of 6% that has been applied for several years in the tourism sector has not brought a decrease in informality in the sector. At least 38% of the businesses asked in the last survey of the Investment Council confirm exactly this, while 33% said that they do not know. 

Only 24% think that this measure has had a significant impact, while 5% have expressed a different attitude. The Investment Council has assessed that the recent changes in the law on tourism address this problem and such an approach should be applied in other sectors where there is high informality.

"Cases of informality in special sectors, such as that of tourism (unregistered employees, unstandardized, unlicensed accommodation structures and outside the radar of fiscal administration institutions at the central and local level), have been discussed earlier in Investment Council’s meetings. For these cases, it has been recommended that the solution to the problem should not only be seen in the role of the tax administration to identify informality, but also in the role of fiscal and sectoral regulatory policies, including here the market forces that push businesses towards increasing standards, growth of competition and, consequently, formalization,” the Council noted.

“The most recent changes proposed in Law 93/2015 "On Tourism", (amended) with a focus on increasing the quality of services in the tourism sector, have been driven by the increase in demand for tourist services due to the rapid and progressive growth of the sector. The formalization of the sector and consequently of other sectors related to it leads to the increase of the quality of the offer and the implemented standards," says the Council’s report.

The government reduced for the first time to 6% the VAT on accommodation in 2017, a request that had been made by the sector for years, as a way to increase competitiveness. A year later, as it had approved the conditions for structures with special status bearing the name of international brands, the reduction of VAT to 6% was extended beyond the supply of accommodation services, including other activities related to these structures. Despite the VAT reduction, the government itself has been skeptical about the formation of the sector. 

In 2023, when Albania set its record for tourist flows, in many cases it was underlined that this was not reflected in the structures. The government warned of a new approach to formalization, underlining that it would establish references.