Second Environmental Performance Review of Albania

Chapter 5: Economic instruments and expenditure for environmental protection69replaced by a sales tax on the purchase of usedvehicles within the country which maintained thepositive bias in favour of vehicles less than 10 yearsold.The import tax for used vehicles overlapped with asmaller import tax for all transport vehicles, whichalso had a bias towards more environmentallyfriendly vehicles. This tax was abolished in 2011.The import tax for all vehicles was calculated on thebasis of the type of fuel used by the car, the size ofthe car’s engine and a coefficient for the years of use.The fuel-type component of the vehicle tax was20,000 lek (€145) for cars with a gasoline engine and25,000 lek (€183) for those with other types ofengines.The coefficients for years of use varied from 0.0016for a car up to 2 years old to 0.0048 for a car olderthan 10 years. These coefficients mean that, all otherthings being equal, the tax for a 10-year-old vehiclewould be three times as high as that for a two-yearoldvehicle. The 2008 Law on National Taxes alsodefined lower limits: the tax should be at least 60,000lek (€438) for cars and other vehicles with 10 ormore years of use. The same tax should be at least40,000 lek (€292) for vehicles with less than 10 yearsof use.The import tax on transport vehicles was replaced byan annual tax on used vehicles. Following the 2011amendments to the 2008 Law on National Taxes, theannual vehicles tax was suspended for vehicles up tothree years old. All other vehicles are required to payan annual tax at the time of their inspection. Theamount of the tax is calculated multiplying the car’sengine size (in cm 3 ) with a fixed fuel-type coefficientwith a variable coefficient which increases with theage of the vehicle. The fixed fuel-type coefficient isset at 20 lek for petrol-fuelled vehicles and 25 lek forgasoline-fuelled vehicles. The age coefficient starts at0.18 at the fourth year of a vehicle’s age andincreases in annual increments of 0.01 until the tenthyear of the vehicle’s age and thereafter by annualincrements of 0.04. The coefficients for buses start at0.07 at the fourth year and increase by 0.01 annuallyuntil the 14th year and by 0.03 thereafter. Thecoefficients for all other types of vehicles start at 0.20at the fourth year of the vehicle and increase by 0.02annually until the 24th year.The 2011 amendments to the 2008 Law on NationalTaxes also abolished the annual road circulation taxon all vehicles. Before its abolition, the annual taxwas differentiated according to the type of vehicleand was heavier on petrol-fuelled vehicles thangasoline-fuelled ones. This tax was collected during avehicle’s technical control. This tax revenue wascollected by the regional directorates of the GeneralDirectorate of Service Road Transportation.In addition to the import tax, a mostly nominal roadcirculation tax on foreign vehicles was imposed onforeign-registered vehicles which remained in thecountry for more than 60 days per year.Table 5.1: Revenue from economic instruments, 2007-2009, €Environmental taxes and fees 2007 2008 2009Used vehicle import tax 21,167,939 20,801,527 20,000,000Fuel tax 4,175,573 4,396,947 3,480,916Forestry fees 1,876,191 1,776,029 1,505,805Plastic packaging tax 1,282,443 1,213,740 1,206,107Water use tariffs 626,896 45,690 317,980Environmental licence fees 221,439 272,513 230,574Environmental expert certificate fee 26,089 30,081 0Environmental fines 20,304 8,143 380Seal fees 15,159 25,726 18,450Fishing fees 12,414 25,446 33,038Forestry Police fines 5,129 9,446 1,451Professional permit 0 0 626Total 29,429,576 28,605,288 26,795,327Memo item:MoEFWA annual budget 15,048,780 16,276,235 16,625,203Source: Ministry of Environment, Forests and Water Administration, 2011.Vehicles that remained for less than 60 days weresubject to payment of a symbolic amount of 1€ upontheir exit from the country.Local taxes also apply in the case of vehicles, inaddition to the national taxes discussed above. Until2011, all vehicle owners were obliged to pay anannual registration tax defined by the vehicle type. In