Dairy factory

VAT Reduction for Agro-Processing Proposed

The Tirana Chamber of Commerce and Industry proposed reducing value-added tax (VAT) on agro-processing to 5–7%, exempting manufacturing raw materials from customs duties, and increasing the fiscal depreciation rate for machinery from 20% to 40% in the 2027 Fiscal Package.

These proposals have been submitted to the Minister of Economy and Innovation, Delina Ibrahimaj, and the Minister of Finance, Petrit Malaj, with the aim of easing the fiscal burden on businesses, stimulating investment, supporting exports, and boosting the competitiveness of the Albanian economy.

The document, signed by the Chamber’s President Nikolin Jaka, emphasizes that the proposed measures aim to create a fiscal policy that supports production, fosters employment, and helps Albanian enterprises meet European Union standards.

Regarding consumption taxes, the Chamber calls for a VAT reduction for manufacturing industries and the application of a 5–7% rate for the agro-processing sector. Additionally, it proposes including all operators involved in milk collection and processing in the VAT scheme, regardless of their annual turnover. Another proposed measure is the application of a zero VAT rate to domestically produced organic fertilizers derived from recycled animal and plant waste, aiming to foster organic farming, environmental protection, and import substitution.

To support the manufacturing industry and exporters, the Chamber calls for the exemption of raw materials from customs duties, the reimbursement of duties paid on raw and auxiliary materials purchased in the domestic market, and the suspension of upfront VAT payments at customs for imported raw materials used in production.

The package of proposals also includes VAT exemptions for imported machinery intended for investments in the energy and manufacturing sectors, excise duty refunds on gas and fuels, the payment of infrastructure fees in three installments, and a review of property taxes for manufacturing enterprises.

The Chamber also proposes raising the fiscal depreciation rate from 20% to 40% for machinery and equipment invested in the manufacturing industry. According to the document, accelerated depreciation would help businesses recoup investments faster and drive technological modernization, automation, and productivity growth. A specific set of proposals concerns fiscal and financial support for meeting EU standards, particularly regarding environmental protection, food safety, hygiene, and technical standards.

To this end, the Chamber calls for fiscal incentives for investments aimed at meeting European standards, subsidy schemes and soft loans for technological modernization, as well as direct grants for the agro-processing industry.

The document also proposes the creation of fiscal mechanisms to incentivize scientific research and innovation through tax relief on research and technological development expenditures, additional tax deductions for innovation investments, and facilitation for the import of research equipment, software, and patents.

The Tirana Chamber of Commerce and Industry seeks ongoing cooperation with the government to review these proposals, believing that a stable and predictable fiscal framework would help improve the business climate and align the Albanian economy with European standards.