Opinion
A tax cut counts only if it reaches the checkout
The 2027 fiscal package promises cheaper food and fuel, but raises the standard VAT rate, the dividend tax and hotels. Citizens have the right to see the full account before the vote.
By ANN Newsroom · Newsroom
October 28, 2026, 19:00 · Updated 18:43 · 2 min read
The 2027 draft budget, the first above 10 billion euros, reached Parliament on Wednesday with two promises every family understands at once: VAT on 54 basic foods falls from 20% to 6%, and the 27-lek circulation tax is removed from diesel and gasoline, with an expected cut of 32 lek per liter at the pump. Prime Minister Rama estimates that families will keep about 150 million euros a year.
But the package has another side. The standard VAT rate rises by one point, hotels go from 6% to 10%, the dividend tax from 8% to 15%, and the VAT registration threshold falls to 5 million lek. The Alliance of Free Professionals calculates that the combined burden on profit and dividends rises from about 21.8% to 29.45% and notes that the International Monetary Fund has recommended a VAT threshold of about 8 million lek.
The main question is not whether bread should be taxed less and wealth more; there may be consensus on that. The question is whether the cut will reach consumers. The Alliance itself says basic foods could get up to 11.7% cheaper, but only if the benefit is passed on in full. For fuel, too, according to a Top Channel analysis, the cut of about 32.4 lek is theoretical and depends on how much retailers pass on to prices.
The government promises price boards for the basic basket, but it has not published the impact assessment for each measure that the Alliance is asking for, while the supertaxes on villas, empty apartments and luxury cars were announced without rates. On the other side, PD promised a day earlier to scrap the package and introduce a 10% flat tax; that promise also needs figures showing how it would be paid for.
Our proposal: before the vote, the Ministry of Finance should publish an impact assessment for each measure; during the first six months of 2027, the average prices of the 54 products and of fuel should be published every month, compared with December; and if the cut does not show up, Parliament should review the measure in July. A lower tax makes sense only when it is felt at the checkout.
