The new fiscal package will bring no real relief to Albanian citizens and businesses, according to Dorian Teliti, an economic adviser to the Democratic Party. Appearing on News24’s “Minuta e Parë,” he criticized the proposed measures, estimating that the financial burden will increase by around €200 million next year despite a VAT cut for 54 products.
Teliti said the figure comes from calculating each item in the package. He also objected to describing the package as neutral, arguing that such a description shows tax obligations are not actually being reduced.
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He also focused his criticism on how the Albanian market operates. The Democratic Party’s economic adviser argued that a VAT cut for 54 products would have its full effect on prices only in a market with free and fair competition. In Albania, he said, an oligopolistic structure prevails, with a limited number of operators controlling the import and sale of many products consumed by households.
As a result, he warned that tax cuts do not necessarily translate into lower bills for consumers. Teliti also spoke ironically about the explanations he believes the governing majority may offer in January if prices do not reflect the tax relief.
Another concern he raised was the increase in VAT from 20% to 21%. He said it would push up the prices of other products outside the 54 categories covered by the proposed cut.
Elaborating on his objections, Teliti called the claim that the package would be neutral problematic. According to his calculations, when each item is examined separately and the overall financial impact is then assessed, citizens and businesses will pay a total of €200 million more next year.
As for the 54 products, he acknowledged that a VAT reduction is planned for them but stressed that the full benefit would be possible in a perfect market. Under conditions of full competition, Teliti explained, lower taxes also lead to lower prices. In his view, however, the Albanian market does not operate on the basis of free and fair competition but is oligopolistic, while most products consumed are imported by a concentrated group of people.
He said he would like the measure to bring prices down but predicted that in January the governing majority would argue that it had cut the tax, even though the change had not been reflected in prices for citizens.
By contrast, Teliti said, the increase in the tax from 20% to 21% is automatically passed on to the prices of other products. He insisted that all products outside the list of 54 would become more expensive.
