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The Council of Ministers approved the annual report on state aid for 2023. According to the report, the amount of state aid provided by Albania in the period 2019-2023 is estimated at about 63,099.26 million Albanians, or 613.93 million euros, of which 8565.5 million Albanians, or 83.34 million euros, or 0.37% of GDP, will be provided in 2023.
Horizontal aid accounts for the majority of total aid in 2023 (about 61.58%), while sectoral aid accounts for 38.42% of total aid. “Most state aid schemes do not exceed the EU’s ‘de minimis’ limits and therefore do not present a problem from an international trade perspective.
The main instruments of state aid in Albania in 2023 are grants and tax exemptions, repayments or reductions in tax rates. According to Article 32 of Law. 9374 of April 21, 2005 “On State Aid”, as amended after approval by the Council of Ministers, the annual report on state aid for 2023 will be submitted to the European Commission”, the government said yesterday, with immediate effect after its publication in the Official Gazette.
How is the aid distributed?
More specifically, horizontal State aid includes, first of all, employment aid. Employment aid is authorised by State Aid Commission Decision No. 100, dated 16 October 2020, “Authorisation of State Aid ‘Promotion of Employment Programmes through Employment, Vocational Training and Professional Practice’”.
“Based on VKM No. 17 of January 15, 2020 “On the procedures, standards and rules for the implementation of the employment promotion program through employment, vocational training and professional practice”, as amended, the program had the following impacts: Employment Program: 57,745,841 ALL of the program funds, 56,325,549 ALL, or 98% of the program funds, were actually realized under this program. A total of 153 entities benefited through the program, providing employment opportunities for 363 unemployed jobseekers. – says in the decision. Another type of aid is training. Training aid is authorized by State Aid Committee Decision No. 100, dated October 16, 2020, “Authorization of state aid ‘Promotion of employment programmes through employment, vocational training and professional practice’”.
“Training through work program: The program planned to train 13,334,549 trainees, and the actual number of implemented trainees was 12,873,326, which is 97% of the planned funds. Through this program, a total of 106 units benefited, and 138 unemployed job seekers were employed. Professional practice project: This project planned 18,369,584 ALL, and the actual number of implemented trainees was 15,885,376 ALL, accounting for 87% of the planned funds. Through this program, a total of 125 units benefited, solving the employment problems of 306 unemployed job seekers. Emphasized in the report.
Thus, aid to sports is authorized by the State Aid Committee Decision No. 29. 54 of January 26, 2015 “On the existing support program of state budget allocations for the sports sector”. The main objectives of this aid program are the promotion of sports culture, physical education and sports activities, and the increase of citizens’ participation in sports, and ALL 915.87 million has been provided until 2023.
“Promotion of cultural aid: Cultural aid is authorized by State Aid Committee Decision No. 29. 56, dated June 4, 2015, “Authorization of state aid for cultural activities, goods and services”. In 2023, the State Cultural Revitalization Subsidy Fund of 156.55 million yuan supported 172 cultural and artistic projects in the form of public funds. Business Aid: This category includes data on state aid authorized by the decision of the State Aid Committee. May 24, 2008, “On determining the conditions and procedures for reimbursement of excise taxes on fuel consumed in heating greenhouses for the production of industrial and agro-industrial products for the technological needs of production. ” The decision stated.
Thus, by 2023, providers and implementers of state aid reported that through the program of refunding excise taxes on fuel consumed in heating furnaces used to produce industrial and agro-industrial products, the amount of state aid was ALL 233.15 million with 6 beneficiaries. State aid for R&D is granted to enterprises that sign the “Hydrocarbons Agreement” and their subcontractors, with VAT exemption for all contractors and subcontractors engaged in the R&D phase of hydrocarbon operations. In 2023, foreign companies carrying out hydrocarbon operations in Albania reportedly benefited from import exemptions (VAT and customs duty exemptions) in the amount of ALL 3,864.73 million.
“Aid to SMEs: This category includes data on state aid authorized under KNSH Decision No. 2. 103 of July 19, 2021 “Authorizing state aid “Women’s empowerment and promotion of entrepreneurship” as amended. In 2023, 20 beneficiaries received support under the program for a total amount of ALL 9.5 million”, – This was highlighted in the report.
Departmental State Aid
The absolute value of sectoral state aid will amount to 3291.21 million ALL (32.02 million EUR) by 2023. The weight of this category in the total aid in 2023 is 38.42%. In the structure of sectoral (vertical) aid in 2023, tourism aid accounts for the main share (75.69%). In 2023, public transport aid from the state budget to support rail transport will amount to ALL 490 million. Public services aid: In 2023, public services aid will take the form of state budget subsidies to water companies – sewerage totaling ALL 310 million.
The subsidy is intended to clear debts with the tax authorities and OSHEE sh.a. Beneficiaries in 2023 include six regional water and sewerage companies and ITUN. The largest beneficiaries are the following companies: Durrës with ALL 104.6 million, Elbasan with ALL 68.48 million and Lezhë with ALL 47.99 million.
“According to the decision of KNSH. No. 82 of May 17, 2018, authorizing state aid “For the scheme of fiscal incentives for the tourism sector”, state budget aid to the tourism sector in 2023 enables accommodation structures to benefit from the reduction of VAT from 20% to 6. 2023, the amount is ALL 2,376.67 million to 168 beneficiary entities. According to the decision of KNSH. No. 74 of December 12, 2016 “Authorizing state aid through financial support for tourism sector projects”, ALL 114.54 million was provided to 33 beneficiaries by 2023. “State aid provided by state sources, depending on the type (instrument) used, constitutes an actual or potential expenditure of public wealth, having an impact on the collection of public revenues. In 2023, state aid is provided mainly in the form of subsidies and fiscal incentives. With reference to the methodology used in the European Union, state aid instruments are divided into: Subsidies and grants; Tax exemptions, tax deferrals, reduced tax rates and deductions for social security contributions; Equity participation; Soft loans; Other instruments; Guarantees”, – The report said.
Supporting Article 100 of the Constitution and Article 32, Point 2 of Law No. 1. Decree No. 9374 of 21 April 2005 on State Aid, as amended by the proposal of the Minister of Economy, Culture and Innovation, The Council of Ministers decides: Approves this decision on the State Aid Report for 2023, in accordance with the text attached to Decree No. 9374 of 21 April 2005 on State Aid. This decision enters into force after its publication in the Official Gazette.
The annual report on state aid is prepared in compliance with the obligations under Article 71, point 5 of the SAA and the 2006 CEFTA Agreement to ensure international transparency. The report is prepared by the Business Promotion Policy Directorate of the Ministry of Economy, Culture and Innovation (MEKI) in accordance with the State Aid Committee’s decision on authorising state aid. The presentation and analysis of data in the report follows the European Commission’s methodology.
The data contained in this report are reported by implementers of approved state aid programmes in accordance with decisions approved by the State Aid Committee. The 2023 report contains data for the period 2014-2023, comparing state aid for these years, both at the national level and in comparison with state aid provided by EU countries. The report describes the main objectives that Albania has achieved in the field of state aid and the main instruments used in the period 2019-2023.
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