Kosovo Government plans to change tax system

Prishtina, 30 April 2007 – The Kosovo Government intends to change the tax system since the existing one does not provide good possibilities to develop businesses. In regards to attracting foreign investments, the existing level of taxes is not competitive in the countries of the region.

“We are currently compiling a plan that will soon be public,” stated Minister of Trade and Industry Bujar Dugolli.

The tax system negatively influences the insurance industry, which for eight years now has not had sufficient funds to cover damages caused by natural disasters.

The Assembly Committee for the Budget has begun to amend the Law on VAT. PDK Committee member Safete Hadergjonaj informed that the PDK Assembly group proposed to remove VAT for print and electronic media and establish four VAT levels. For necessary products such as food, VAT should be 5% and 18% for luxurious ones such as gold, cigarettes or vehicles.

“We are committed to reviewing and adopting fiscal policies and tax policies. But we cannot change them all at once as we should bear in mind the effect on budget revenues,” stated Minister of Economy and Finances, Haki Shatri.

According to analysts, the new tax policy would bring to surface small problems in cash collection for the budget. However, it would be of benefit for local businesses since it would make them equal competitors in the CEFTA expanded market.