Albanian livestock producers seek VAT reform

Livestock and dairy sector representatives in Albania are calling for a revision of the Value Added Tax (VAT) scheme to stimulate the development of the livestock industry.

While domestic milk production has risen due to the expansion of large farms and improved productivity, stakeholders report that the current VAT structure creates significant hurdles. Small farmers struggle to expand because they cannot directly import livestock due to licensing requirements, and purchasing from local wholesalers adds VAT costs that cannot be credited.

Large farms also face fiscal challenges; while they benefit from VAT exemptions on imports, they must charge VAT when selling to small farmers who cannot credit the tax. Furthermore, purchasing livestock feed from small farmers often fails to create creditable VAT, resulting in monthly tax obligations of 2 to 3 million lek for some large operations.

Dairy processors are also requesting a reduction in the 20% VAT rate on dairy products, noting that regional competitors benefit from lower rates on food basket items, which impacts their market competitiveness.