The development of Montenegro’s Fiscal Strategy for 2024-2027 has involved extensive dialogue, resulting in valuable feedback from various stakeholders. The Ministry of Finance (MF) is now integrating these suggestions into the final document.
According to the MF, the aim is for the final strategy to address both the needs of citizens and the economy, while safeguarding state interests.
A notable proposal within the draft strategy includes a tax reform that involves amending the Excise Tax Law. Specifically, there is a proposal to introduce an excise tax on still wines at 25 euros per hectoliter, replacing the current zero rate. This measure is designed to increase budget revenues by taxing the alcohol content in these wines, which ranges from 1.2% to 15% by volume. This change is in line with EU directives on excise duties for alcoholic beverages.
The MF explains that these proposed changes are part of a comprehensive strategy to reduce the tax burden on labor while ensuring consistency with other proposed measures. These measures are undergoing detailed analysis by interested parties through the public consultation process, which will continue until its conclusion.
Additionally, the strategy proposes introducing two reduced VAT rates: 7% and 15%. These rates would apply to books, monographs, serial publications, and daily and periodical press. This proposal is also in accordance with EU Directive 2006/112. The MF plans to review the application of these rates during the public consultation and will propose the best solutions during planned amendments to the VAT Law in the fourth quarter of this year.
On the topic of gambling, the MF noted that Montenegro is among the few countries in the region without a tax on gambling winnings. Slovenia, Serbia, Croatia, and Bosnia and Herzegovina have implemented such taxes. The MF proposes a 15% tax on gambling winnings, aiming to boost state revenue without imposing additional burdens on gambling operators. This tax would take a portion of the winnings for the state, with the remainder going to the winner. The goal is to enhance budgetary income and reduce gambling dependency, particularly among younger individuals.
The MF also invites stakeholders to provide feedback on proposed changes to the Personal Income Tax Law, which had been abolished in 2015. Comments, suggestions, and feedback are encouraged during the public consultation period.
The Ministry assures that all feedback received will be thoroughly reviewed and considered. The final Fiscal Strategy will be developed to support strategic economic goals, foster sustainable and inclusive growth, improve citizens’ quality of life, and ensure macroeconomic and fiscal stability.
