Agriculture is one of the main sectors and the most important contributors to the Albanian economy, accounting for about 20% of the Gross Domestic Product (GDP) (AIDA, 2021). Also, in the labor market it accounts for about 31% of the total employed (ILOSTAT, 2026), which compared to the countries in the region has the highest level of employment. In addition to this, agriculture, being a strategic sector of the government, also contributes to economic growth and the improvement of the welfare of the population living in rural areas. Even though it is a sector with a high rate of informality, in recent years the Albanian government has intervened several times in support of agriculture through fiscal policies such as changing the compensation rate for farmers, agricultural subsidies, or the exemption of agricultural inputs from VAT. We will refere the VAT exemption of agricultural inputs, where in Albania the trading of these inputs according to some legal changes is considered a supply exempt from VAT since 2019. The purpose of the exemptions is directly related to increasing investment in agriculture, increasing farmers' incomes, reducing production costs for agricultural products, and being competitive in the market. In this study we will analyze how the exclusion of agricultural inputs from VAT has affected, whether it has been effective for farmers, how it has influenced the price, production cost, and productivity of agricultural products in recent years.

agriculture, agricultural producer, exempt rate

agronomy

Presentation: poster