News"Europe Now 2" tax reform program: Key details unveiled

“Europe Now 2” tax reform program: Key details unveiled

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Milena Milović, the Prime Minister’s advisor on economic policy, has detailed the main features of the “Europe Now 2” tax reform program, which includes two major changes: reducing the tax burden on labor and increasing both minimum and average wages in Montenegro.

Speaking at a roundtable discussion during a public debate on the Fiscal Strategy, held at the old government building in Podgorica and organized by the Ministry of Finance, Milović outlined the program’s objectives.

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The reform aims to lower the tax burden on labor by reducing employee pension and disability insurance contributions from 15% to 10%, and eliminating employer contributions from 5.5% to 0%.

“The second key aspect of the program is the increase in both minimum and average wages in Montenegro,” Milović explained.

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She emphasized that the benefits of the “Europe Now 2” reform will extend to both employees and employers.

“Employees will see wage increases with the minimum wage proposed to rise to €600 for those with medium-level qualifications, and €800 for those with higher qualifications,” Milović said.

With the minimum wage set at €600, employees will experience a 33% increase, while those receiving €800 will see a 78% rise.

“Every employee will benefit from higher wages due to the reduction in contributions, as employers are required to adjust these contributions into the net salary,” Milović noted.

For employers, despite the wage increases, those paying above €600 will benefit from cost savings.

“These savings can be reinvested into wage increases, new investments, or used to balance out increased wages, depending on their workforce structure,” she added.

Milović also highlighted that pensioners will see a 7-8% increase in pensions next year due to rising average wages and projected inflation.

“By reducing the tax burden on labor, Montenegro will become one of the countries with the lowest labor costs in Europe,” Milović stated.

The Ministry of Finance emphasized that the Fiscal Strategy outlines fiscal measures designed to enhance citizens’ living standards, improve the business environment, and boost economic competitiveness, while ensuring macroeconomic stability.

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