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Montenegro, AmCham: tax changes introduce uncertainty, unpredictability and additional costs

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Frequent changes in the taxation system and tax rates introduce uncertainty, unpredictability and additional costs, and disincentivize current and potential investors to invest in Montenegro, announced the American Chamber of Commerce (AmCham).

AmCham said that today they sent a letter to Prime Minister Dritan Abazović and Minister of Finance Aleksandar Damjanović, on the occasion of the adoption of the Proposal for Amendments to the Law on Excise Taxes at the Government session on February 10.

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– In the letter, we invite them to a meeting in order to express our dissatisfaction with the communication with the private sector regarding important legal changes that may have far-reaching effects on the business of our members in Montenegro and to jointly consider how to avoid the potential negative effects of these changes – it is stated in the statement.

AmCham believes that such a meeting is extremely important in order to consider recommendations for retaining existing and attracting new investors to Montenegro.

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They recalled that last year AmCham signed memoranda of cooperation with the Government and relevant ministries for work on the Dialogue Governance program, as a kind of platform for timely and continuous private-public dialogue, which formally supported the timely involvement of the business community in the adoption of new and/or changes to the existing regulations of importance for the business environment.

– The intention of the Chamber is that the mentioned program lives in practice and is actively implemented. However, the adoption of a set of changes to important tax laws without any consultation with the business community certainly does not contribute to the realization of this intention – the announcement states.

As they added, the measures introduced during the year make it even more difficult for companies to operate, since the business plans have already been adopted a long time ago.

AmCham also believes that any measure that leads to an increase in the price of products and services and a reduction in the purchasing power of the population, such as an increase in excise taxes, inevitably leads to an additional drop in consumption and an increase in the gray economy, the share of which is still at a high level compared to European countries, resulting in a reduction in tax coverage and, ultimately, budget revenues.

– In the previous period, the Government and the Ministry of Finance made enormous efforts to suppress the gray economy, which was primarily reflected in the increase in budget revenues and the stabilization of the market for excise goods. We believe that careless and excessive increases in duties on certain products can reduce these effects – AmCham concluded.

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