Kosovo to Scrap Tax on Albanian Cement

Kosovo's Minister of Trade and Industry, Mimoza Kusari-Lila, announced that the tax would be lifted on August 1, “after analysis proved that the measures had created stability for local producers.”

Kusari-Lila imposed the tax less than two months ago, on June 11, following  complaints by a Kosovo cement producer, “Sharrcem”, that cheaper imports were harming production, and warning that it might need to downsize as a result.

According to Kosovo’s Foreign Minister, Enver Hoxhaj, the measure was being lifted because it had become a bone of contention with neighbours, especially Tirana.

“Cement and potatoes will not be allowed to become an obstacle in Kosovo-Albania relations,” Hoxhaj said.

Trade relations between Kosovo and Albania hit a low point last year, after Albania’s Ministry of Trade imposed a 30 per cent tax on the import of potatoes from Kosovo.

The Prime Ministers of the two countries had to meet to solve the dispute, after which the import tax on potatoes from Kosovo was scrapped.

Kosovo’s Deputy Prime Minister, Behgjet Pacolli, argued on Friday that the cement tax had never been directed against Albania, but had been designed to safeguard the market from “dumping”.

Dumping is the practice of selling a product in a foreign country for less than either the price in the domestic country, or the cost of making the product.

“The decision safeguarded over 500 jobs and brought into the budget considerable income. Such measures are often taken to protect local producers and stimulate investments,” Pacolli was quoted saying.

But the story as such is not over yet, as Kosovo’s Competition Authority has launched an inquiry into the introduction of the tax on cement.

“After monitoring the cement market we found that the import tax caused a disorder in the market, which represents a breach of the Law on Competition,” a press release from the Competition Authority said.

The Ministry of Trade and Industry claims that the market was disrupted by imports of cement from Italy, and not because of the tax protecting local producers.

Some lawmakers from the ruling Democratic Party of Kosovo, PDK, have, however, demanded the dismissal of Mimoza Kusari-Lila, arguing that her measure allowed SharrCem to have a monopoly on the market for several weeks.