Montenegro’s new tax measures under the “Europe Now 2” program, including increased VAT rates and excise taxes, generated around €1.7 million in January, according to data from the Tax Administration and Customs Administration.
Pension fund deficit remains high
While these new revenues were intended to partially cover the pension fund deficit—caused by the halving of pension insurance contributions—January’s collections from pension insurance contributions amounted to €14.3 million. However, pension payments totaled €62.9 million, leaving a deficit of €48.6 million. This shortfall is typically higher in January due to some employers paying salaries with contributions before the new year.
Higher VAT on hotels brought €587,000 more revenue
The VAT rate on hotel accommodation increased from 7% to 15%. In January 2025, the Tax Administration collected €911,460 from hotels, compared to €324,472 the previous year, an increase of €587,000. Hotel operators argue that this tax hike reduces Montenegro’s tourism competitiveness compared to neighboring countries with lower VAT rates.
Excise Tax on Wine Generated €345,000
A new excise tax of €0.25 per liter was introduced for still wines, later reduced to €0.125 for small domestic producers. The Customs Administration collected €309,220 from inventory stockpiles, €19,349 from new wine imports, and €14,669 from domestic producers. Small wineries and major producers, including Plantaže, opposed this tax, noting that similar levies do not exist in most regional and EU countries.
Increased Excise Taxes on Sweets and Soft Drinks
- Excise taxes on sugar-based products, cocoa products, and ice cream brought in €209,470 in January, only €6,000 more than the previous year.
- Excise taxes on carbonated drinks generated €934,118, a €302,000 (47.6%) increase compared to January 2024.
No revenue yet from gambling winnings tax
A new 15% tax on gambling winnings over €300 was introduced but has not generated any revenue due to a lack of clear implementation guidelines. The Tax Administration announced that it will take measures against gaming operators who have not complied with reporting requirements.
€460,000 collected from online shopping tax
From January 1, VAT exemptions for international postal shipments under €75 were removed. The Customs Administration reported that 65,000 parcels valued at €2.5 million were imported in January, resulting in €460,000 in customs duties and VAT.
These tax changes aim to reduce the pension fund deficit and combat the shadow economy, but their long-term impact remains uncertain.
