The Albanian Tourism Association has warned that a proposed increase in value-added tax on accommodation from 6% to 10% could undermine the sector’s competitiveness. The government drafted the measure without prior consultation with stakeholders or a comprehensive impact assessment, the association said.

The association attributed tourism’s growth from 6 million to 12.6 million visitors to the reduced tax rate. It said the sector now accounts for one-quarter of gross domestic product and 44% of exports.

Meanwhile, the association highlighted rising costs for tourism businesses. These include a 40% fall in the euro’s value, doubled wages and higher raw material prices linked to global crises.

It also pointed to widespread informality in accommodation. According to the association, daily rental apartments account for 78% of capacity, while hotels represent 22%. Albania also has a smaller share of four- and five-star hotels than Montenegro and Croatia.

The association urged the government to suspend the proposed tax increase, consult the sector and focus on tackling informality. It warned that higher taxes could weaken Albania’s position in the regional tourism market.

/a.p./