Jovo Perović, a councillor for the European Alliance in Budva’s Municipal Assembly, urged Montenegro’s MPs to support a proposal by the European Alliance parliamentary group to cut VAT on tourism services from 15% to 7%. The European Alliance in Budva supports the reduction, which it says would make Montenegro’s tourism offer more competitive.
Perović said a 114.3% increase in the VAT rate had pushed up the prices of tourism services. He argued that Montenegro must keep its tourism sector competitive with regional and European markets, and said the state’s task was to protect tourism from “fiscal shocks”.
Attracting new visitors and encouraging longer stays would have a greater effect on the state budget than a one-off tax increase, Perović said. Tourism is a strategic sector that generates private-sector jobs and a significant share of revenue for state and local budgets. He described Budva as the “backbone of Montenegro’s tourism and overall economy”.
Budva attracted more than 40% of visitors to Montenegro in the first 10 months of this year and accounted for 45% of overnight stays, according to Perović. He said tourism businesses face fiscal shocks, changes to regulations without prior notice, parafiscal charges and administrative challenges. They remain a key support for an economy that records strong growth in years with good tourist seasons, he said.
