Taxation of Agricultural Sector in Albania

Agriculture contributes about 20% to the Gross Domestic Product in Albania. It is one of the main sectors of the Albanian economy, which supports and impacts other important sectors such as tourism, product processing and exports. In the conditions of the globalization of the economy, the free movement of goods and capital, and multilateral and bilateral agreements for the removal of tariff barriers, Albanian agriculture faces the challenges of very strong competition from the countries of the region, EU countries and beyond. In these conditions of strong competition, what can make Albanian agriculture survive, is that its products appear not only in the domestic market and those of the region but also in the international markets of goods and products. The ambitions of our country for the development of intensive, yearround, coastal and mountain tourism, elite and agrotourism, requires the increase of the quantity, quality and lowest possible prices of agricultural and livestock products, in order to avoid the competition of imported goods that can be traded at lower prices. How should agriculture, farmers, livestock, agricultural and livestock production be stimulated? Should they be incentivized through exemptions from the tax system or should the process of stimulating production through subsidizing the elements of agricultural and livestock production be used more efficiently? The strategy implemented in our country has strengthened tax exemptions for inputs, agricultural and livestock products, farmers’ income, etc. This strategy intends to promote the cooperation of agricultural and livestock production in Agricultural Cooperation Societies by offering minimum tax rates. Considering the great impact that agriculture has on the economy, especially in the tourism sector, we will deal with the tax policies applied in the agriculture and livestock sector and the effects of tax incentives over the years. The objective is not only to support the farmers and livestock farmers with funds but also to ensure tax relief and stimulate tax treatment for agricultural and livestock production, aiming to increase competitiveness not only in the regional market but also in the EU market, without compromising the quality of the product.