Pristina, September 2, 2014/ Independent Balkan News Agency
By Elton Tota
Following the recommendation to lift VAT on power supply in order to have a reduction of its price, Kosovo Chamber of Commerce has also recommended for the tax on the royalty of lignite that is used for the production of power supply to be reduced, as it has been increased by 1000%.
Coming up with new proposals for the suspension of the decision of the Regulatory Authority of Energy for the rise of power supply by 5,18%, KCC has recommended the analysis of the royalties on lignite and the tax in it, which is very high. According to KCC, the drop of this tax would be another alternative for the reduction of the price of power supply.
“The royalty is a tax which is paid for every ton of lignite by the holder of the license for its exploitation. In terms of the regulation of charges of power supply, this tax is considered a direct cost which is passed on by the producer of the coal to the generator and then to the public distributor and end consumer of power supply. As a result, for the part of the coal which is used for the production of power supply, this tax is not a cost of the producer of lignite, but a government tax that the public distributor of energy cashes in from consumers for the government. The value of the royalty tax until January 2013 was 0,26 Euros per ton. In January 2013, upon the proposal of the government and decision of the parliament of Kosovo, the tax on royalty goes up by 1011% and becomes 3 Euros per ton. If we bear in mind the plan for the production of lignite for 2014, the value of the cost of this tax will be 24.03 million Euros this year. This represents a direct cost that has an impact in the increase of power supply charges of 10% within a year”, reads the press statement of KCC.
According to this chamber, for the first and second quarter of this year, 8.43 million Euros have been paid in royalty taxes, while 3 million Euros are still to be paid for the second quarter of 2014.
“In the legal point of view, the royalty tax can only be changed upon the approval of the parliament of Kosovo. Nevertheless, the government can temporarily suspend the tax and start the procedures to lift this tax for 2014 with the approval of parliament. The effects would be 15.6 million Euros of reduction for energy producers in 2014. This amount could be used to import more as a result of the defect on Kosovo A plant and to partially fund repairs in this plant”, reads the statement of KCC. /ibna/