ALTAX publishes a new study on the impact of price referencing on the Albanian Economy

In Albania, customs reference prices play a significant role in determining the value of goods and in calculating taxes, including VAT and other import duties. This mechanism is important for tax collection and ensuring fair competition, but it also faces challenges related to price distortions and the growth of informality.

🔹 Customs References and the Growth of Tax Revenues

📌 VAT accounts for 32.5% of total tax revenues in 2024.
📌 In 2023, VAT reached €1.9 billion, or 8.2% of GDP.
📌 The use of customs reference prices has contributed to increased revenue collection, but it has also created barriers for businesses and consumers.

🔹 Key Issues with Customs Reference Prices

❌ Distorted prices – Reference prices often do not reflect market realities and lead to increased costs for businesses.
❌ Promotion of informality – Albania has an informal economy estimated at around one-third of GDP, causing €1.2 billion in annual tax losses.
❌ Lack of transparency – The absence of a clear mechanism for determining prices increases the risk of corruption.

🔹 Regional Comparison

📍 Kosovo – Applies a fairer approach by analyzing demand and supply, instead of relying on fixed references.
📍 Serbia – Uses a transparent price monitoring system, helping reduce informality and raising VAT revenue to 20% of GDP.
📍 North Macedonia – Faces similar challenges to Albania, but has begun modernizing its price monitoring system.

🔹 Domestic Prices and Effects on Local Competition

Domestic reference prices, used for products manufactured in Albania, play a key role in market stability. However, price distortions due to lack of transparency and oligopolistic influence create an unfair market for both businesses and consumers.

🔹 Measures to Improve the System

✅ Review the reference price methodology to better reflect market realities and pave the way for a future policy without fixed references.
✅ Use technology to ensure transparency and efficiency in price monitoring.
✅ Support businesses in avoiding unjustified cost increases and reducing tax evasion.

📖 Read the full study at ALTAX