Albania ranks first among European countries for the highest weight of vehicles with engines over 2,000 cubic meters. According to Eurostat data, about 30% of the total number of vehicles or about 300 thousand belong to the high engine power category. Of the total number of vehicles over 2,000 cubic meters, 27.8% of them are diesel and 2.4% are gasoline.
Albanians' preference for cars with engines over 2,000 cubic centimeters is related to the affordable prices of used vehicles imported, mainly from Germany, Switzerland and Italy, where taxes and insurance for large engines are high.
Also influencing are the perception of the car as a status symbol and the need for more powerful vehicles in areas with difficult terrain, or the fact that historically the roads in Albania have been in bad shape, although the situation has improved in recent years.
This preference for cars with high engine power is expected to penalize many car users. From the proposed changes in the draft law "On National Taxes", owners of these vehicles are expected to face the largest increase in the annual tax liability for used vehicles.
The proposals in the fiscal package create for the first time two levels of taxation according to engine size. Given their high number, a higher fixed fuel tax is proposed for vehicles with engine power over 2,000 cc than for other categories.
Currently, the fixed tax for calculating the annual vehicle tax is 12.5 lek for diesel and 10 lek for gasoline, regardless of engine capacity.
With the new proposal, for vehicles with engines over 2,000 ç, the fixed tax for diesel will be 26 Lek, while for gasoline 21 Lek. While for vehicles with cylinders up to 2,000 ç, including cars, the fixed tax is proposed to be 25 lek for diesel and 20 lek for gasoline. In addition to the fixed tax, the age coefficients are also changing.
Monitor has calculated the new tax for vehicles with an engine capacity of 2,500 cc. According to the calculations, including the new coefficients of the years of use of the vehicles that have been revised, the annual tax for diesel vehicles, depending on the age of the vehicle, will increase from 80% to 289%. For gasoline cars, the tax increase ranges from 65% to 236%.
For both categories, the largest increase, the greatest effect will be felt on older vehicles, aged 30 years.
How much will the tax increase for vehicles over 2 thousand cubic meters; Examples
For a 4-year-old, 2,500 cc diesel car, the annual tax is currently 5,625 lek. After the fiscal changes, the tax will be 13,650 lek, or 8,025 lek more, an increase of 80%.
For a 10-year-old diesel car or one manufactured in 2016, the annual tax liability will increase from the current 7,500 lek to 21,450 lek. An increase of 140%.
Owners of gasoline cars will also face a significant increase, although lower than that of diesel cars. For gasoline cars over 10 years old, the obligation from the current 6 thousand lek is estimated to reach 17,325 lek for cars with 2,500 cylinders. The obligation increases to 11,325 lek or 111% more.
For 30-year-old gasoline vehicles, the annual obligation will reach 43,050 lek, up from 19,500 lek currently. The obligation in value will increase by 23,550 lek or 236%.
The obligation also increases for cars up to 2 thousand cubic meters.
According to the engine power distribution that Eurostat makes for vehicles, in Albania 40% of the total belong to the range from 1,400 to 1,999 cubic meters and 5.5% of them are below the range of 1,399 cubic meters.
Monitor calculated the new tax for vehicles with cylinders up to 2,000 cc, both diesel and gasoline, taking into account the age of the vehicle, the new level of the proposed fixed tax on fuel, and the new coefficients for years of use.
According to estimates, the annual tax liability for diesel cars up to 2,000 cc will increase by 71% to 175%, depending on the age of the vehicle. For gasoline cars, the annual vehicle tax liability will also increase by 71% to 175%, depending on the age.
Current excise duty level
The fixed tax for the type of fuel is 12.5 lek for diesel and 10 lek for gasoline. The coefficient according to the age of the vehicle is as in Appendix 1 attached to this law and is an integral part of it. Vehicles with an age of 0-3 years are not subject to this tax.
Proposal for changes to the fixed tax
-The fixed tax for the type of fuel is 25 lek for diesel, 20 lek for gasoline and 20 lek for gas for vehicles with a volume of up to 2,000 cm3, for cars, ATP motorcycles (according to group I of the age coefficient) and all others (APV) (according to group II of the age coefficient); ii.
-The fixed tax for the type of fuel is 26 lek for diesel, 21 lek for gasoline and 21 lek for gas for vehicles with a volume greater than 2,000 cm3, for cars, ATP (according to group I of the age coefficient) and all others (APV) (according to group II of the age coefficient);/ Monitor
