Montenegro’s transition toward a fully digital tax administration is encountering structural friction, as the rollout of the IRMS (Integrated Revenue Management System) reveals deeper inconsistencies between regulatory design and operational reality.
At a recent roundtable organised by the Chamber of Economy of Montenegro in cooperation with the Tax Administration of Montenegro, representatives of both institutions and the private sector highlighted that the challenges surrounding IRMS extend well beyond technical implementation. They are directly affecting legal certainty, operational efficiency and corporate competitiveness.
The system, introduced as part of a broader tax administration reform aimed at full digitalisation, was designed to streamline procedures, eliminate paper-based processes and enable real-time data exchange between institutions. Yet in practice, businesses report that administrative complexity has not diminished—only shifted into a new digital layer.
Companies point to slow processing times, inconsistent application of rules and limited institutional coordination as key bottlenecks. Requests for documentation, company registration procedures and compliance processes are still subject to delays that disrupt day-to-day operations, particularly for firms involved in public procurement, exports and labour-intensive sectors.
A central issue lies in the interaction between IRMS and the broader legal framework. Misalignment between the Law on Companies and other regulatory provisions creates ambiguity in implementation, forcing companies to navigate overlapping or unclear requirements. This regulatory fragmentation translates into execution risk—where compliance is technically possible but operationally inefficient.
Institutional feedback acknowledges these constraints. The Tax Administration has emphasised that digitalisation is progressing, with more than 95% of business processes now technically available in electronic form, and tens of thousands of tax filings and requests already processed through the system. However, full functionality remains dependent on the integration of all relevant public institutions, many of which are not yet fully connected to the platform.
From a business perspective, the impact is tangible. Delays in issuing certificates, difficulties accessing documentation and procedural inconsistencies are affecting investment timelines, hiring processes and participation in tenders. Rather than reducing administrative burden, the current phase of implementation is creating transitional friction that increases operational risk.
The private sector response is not opposition to digitalisation itself, but to the execution model. Companies are calling for simplified procedures, clearer guidance, faster resolution of requests and more predictable communication channels with institutions. There is also growing support for transitional mechanisms—such as extended deadlines or hybrid processing options—to mitigate risks during the system stabilisation phase.
For policymakers, the IRMS rollout is becoming a broader test of regulatory coherence. Digital platforms can only deliver efficiency gains if the underlying legal and institutional architecture is aligned. Without that alignment, digitalisation risks amplifying existing inefficiencies rather than resolving them.
The current phase therefore reflects a familiar pattern in administrative reform: the technology layer is advancing faster than the regulatory and institutional frameworks that must support it.
