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Opinion / Editorial

Oil and tax

Oil and tax

As of January 1, 2021, farmers (many of whom we call farmers, but to achieve what the developed world understands by being a farmer, must meet certain conditions that our farmers do not yet have, fortunately bad) with us they will buy oil for their jobs in agriculture cheaper. They will buy it without excise (370 old lek per liter), without the turnover tax (270 old lek per liter) and without the carbon tax (30 old lek per liter). In short, they will buy one thousand and forty old lekë per liter, or 670 old lekë less, or half a euro per liter less. Tax-free oil has been an old dream of our farmers, shaken since March 1992. Poorly implemented in 1994-1996, because farmers bought excise-free oil for their children's used Mercedes-Benz cars. Today we have registered farmers who have an identification number in the tax authorities (called "NIPT"). There are 97 thousand of them. Meanwhile, farmers who are not yet registered can be doubled, as we still have 35 percent of the population in the village today. How many farmers work the land? Some have left it barren and settled in the city. According to some indirect data from the National Institute of Statistics (INSTAT), we have about 250 thousand farmers with land. Not everyone works it. Oil 40 percent cheaper (670 old lekë are 40 percent of one thousand 690 old lekë per liter of oil) pushes the farmer to work the land. Not to leave that barren, nor to rent it. Makes it more connected to the ground. It has value as a subsidy, direct state aid for agriculture. It is widely applied in European Union countries. Even to our neighbors comparable to us for budget strength, like Montenegro and Northern Macedonia. Tax-free oil in the village makes agricultural products and products more competitive in the market. A farmer who works the land can receive on average up to 2 million ALL of oil per year without taxes. With the number of farmers registered with NIPT, the Ministry of Finance predicts an annual budget loss from non-collection of taxes on oil in agriculture at the level of 1 billion new lek, or 8 million euros. These will immediately go into the pockets of our registered farmers. That will soon turn into 16 million euros profit in agriculture per year, why will practically double the farmers registered with NIPT. This is because those unregistered will run to register, to benefit from tax-free oil. This surprise move of the government will surely bring back many farmers and farmers who are in the city, to revisit the opportunities of work and investment in their lands in the village. Some immigrants may even think twice about returning. Tax-free oil for the farmer is an early promise of the Socialists, dating back seven years. The Socialists did not keep their promise even in the best budget year, 2018, with economic growth of 4.1 percent. They are making it a reality now, precisely in times of pandemics, when the State Budget has very little money. However, people say, better late, than ever. The 16 million euro profit of farmers from tax-free oil can return to our economy a threefold investment, in more production in greenhouses and production for the domestic market and export. Agricultural exports in the first eight months of January-August 2020 this year increased by 8.3 percent, despite the pandemic! We hope for a strong revival of agricultural production, with cheaper oil. But care must be taken, why the opportunities to abuse the tax-free oil scheme are colossal. Our Ministry of Agriculture and Rural Development hopes that the scheme does not work, based on the tax-free oil of the fishing industry, which has helped a lot.