Reducing Value added tax refunds for farmers from 20 to 6 percent that the parliament approved with the new fiscal package has created a small culprit for the agri-food industry. “I buy a product from a local farmer, and the government does not know me any more 20 percent VAT on purchases, but only 6 percent. But when it sells the processed product then it has to pay 20 percent VAT. This is a 14 percent clean tax on the lap, “said Uran Derri, the Food Manufacturers Association.
To cope with this additional burden, agro-processors say they have two paths; transfer the cost to the farmer or the final consumer. “Or it should reduce by 14 percent the price of buying a farmer’s product or it should increase the consumer’s sales price by 14 percent,” said Uran Derri, the Food Manufacturers Association. But both of these ways seem impossible because of the competition from import. Food industrialists say they are considering another solution. You buy agricultural products in neighboring countries where VAT is 20 percent.
“If I get the tomato in Lushnja with 6 percent. If I get in Macedonia with 20 percent. I clean up and continue to work respecting the law, “said Uran Derri, the Food Manufacturers Association. The government reduced the VAT compensation scheme to farmers at 6 percent after the scheme turned abusive. Money instead of finishing on farmers, on several occasions was held by traders themselves or agro-processors. To compensate for the negative effects of this reduction on farmers, the government abolished the VAT they pay for inputs. But the new scheme is opposed by agro-processors who already threaten to buy agricultural products not from domestic farmers but from neighboring farmers.