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American Firms In Kosovo Laud New Tax Perks

by Mike Godfrey,, Washington

09 January 2018

The American Chamber of Commerce in Kosovo (AmCham Kosovo) has praised Kosovo for suspending customs duties and excise taxes on certain inputs for local manufacturers.

Decision no. 14/7 of October 6, 2017, eliminated customs duties on raw materials, semi-finished products, certain production line equipment, and IT equipment, specifically for exporters.

Decision no. 13/7 of October 6, 2017, reduced the excise duty burden on companies and waived VAT on certain raw materials.

The exemptions, which came into effect on January 1, 2018, are part of a Government drive to support the development of the private sector, and were approved as part of the 2018 Budget, passed by the Kosovo Parliament in December 2017.

In a December 17 press release, the Ministry of Finance also pledged to keep tax settings stable for businesses.

AmCham Kosovo praised the reforms in a statement released on January 5, 2018. It said: "The new fiscal measures… will impact [the] country's private sector positively, and also increase the competitiveness of Kosovo manufacturers vis-a-vis those in the region."

However, the International Monetary Fund has cautioned Kosovo to not provide too much relief for foreign businesses, stating in its Article IV consultation for the territory released in December 2017 that "authorities should broaden the tax base by further strengthening the tax and customs administration to reduce informality." It added that the "introduction of tax holidays or exemptions that could weaken the tax base should be avoided."

TAGS: Finance | tax | value added tax (VAT) | energy | budget | excise duty | contractors | United States | tax reform | Kosovo

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