Montenegro’s move towards a comprehensive digital tax administration is facing significant obstacles as the rollout of the Integrated Revenue Management System (IRMS) uncovers deeper inconsistencies within its regulatory framework. A recent roundtable hosted by the Chamber of Economy of Montenegro, in collaboration with the Tax Administration, brought together representatives from both institutions and the private sector to discuss the implications of these challenges.
The IRMS initiative is part of a broader effort to modernize tax administration through full digitalization, aiming to streamline processes, eliminate reliance on paper, and facilitate real-time data exchange among institutions. However, businesses have reported that instead of simplifying administrative tasks, complexities have merely transitioned into a new digital format.
Key issues identified by companies include slow processing times, inconsistent application of regulations, and inadequate institutional coordination. These factors contribute to delays in documentation requests, company registration, and compliance procedures, significantly impacting daily operations—particularly for businesses engaged in public procurement, exports, and sectors requiring substantial labor input.
A critical concern is the relationship between the IRMS and existing legal frameworks. Misalignment between the Law on Companies and other regulatory provisions has led to ambiguity in execution, compelling companies to navigate overlapping or vague requirements. This fragmentation poses execution risks where compliance may be feasible in theory but inefficient in practice.
The Tax Administration has acknowledged these challenges, noting that while digitalization is advancing—with over 95% of business processes now available electronically—full functionality hinges on the integration of all relevant public institutions. Many of these institutions remain unconnected to the IRMS platform.
The tangible effects on businesses are evident. Delays in issuing necessary certificates and accessing documentation, coupled with procedural inconsistencies, are disrupting investment timelines, hiring processes, and participation in tenders. Rather than alleviating administrative burdens, the current implementation phase is fostering transitional friction that escalates operational risks.
The private sector’s response indicates a desire for improved execution rather than opposition to digitalization itself. Companies are advocating for simplified procedures, clearer guidance, expedited request resolutions, and more reliable communication channels with institutions. There is also an increasing call for transitional measures—such as extended deadlines or hybrid processing options—to alleviate risks during this stabilization period.
For policymakers, the IRMS rollout represents a crucial test of regulatory coherence. The potential efficiency gains from digital platforms can only be realized if there is alignment within the underlying legal and institutional structures. Without this synchronization, there is a risk that digitalization will exacerbate existing inefficiencies instead of remedying them.
This phase of implementation illustrates a recurring theme in administrative reform: technological advancements are outpacing the regulatory and institutional frameworks designed to support them.
