Montenegro, The tax on extra profit that should be paid by 294 companies could cause consequences for the economy, News
The tax on extra profit, defined as a crisis measure for this and the next year, should be paid by 294 companies, writes Pobjeda.
That is as many as 94 companies more than the neighboring, five times larger, Croatia should be taxed additionally, if the law passes with them. Their intention is to tax companies whose annual turnover is greater than EUR 40 million, i.e. eight times more than Montenegrin Finance Minister Aleksandar Damjanović plans.
The 294 targeted Montenegrin companies should, if the law passes in our country, be taxed at a full 33%, tax consultant Milena Golubović calculated. So, they should pay a third of their income to the state. The draft law on solidarity contribution, which is under public discussion until March 20, stipulates that companies with an annual income of more than five million EUR are obliged to pay extra profit.
Business associations and economic analysts warned that the adoption of such a legal solution would cause incalculable harmful consequences for the economy, and that it could lead to the emigration of the most successful companies.
The government, I.e. the Ministry of Finance, explained that they are proposing this measure so that companies, which gained additional profit during the economic crisis, and thanks to government measures in the form of incentives, now show solidarity and help distribute the burden of the crisis evenly. Economic analyst Mirza Mulešković believes that such measures cannot be justified, because they punish the successful.
– Making such decisions, in difficult times for the economy, can have multiple and long-term consequences, such as, for example, the possible decision of successful companies to leave Montenegro – said Mulešković Pobjedi.
According to him, as in the case of the increase of other taxes and excises, this is the easiest way for the administration to make up for the deficit in the budget, without taking into account the consequences.
– Instead of dealing with the informal economy, they decide to put an additional burden on the economy, and the constant change in the business environment creates an image of instability, which can only result in a weakening of the real sector and a decreasing inflow of investments – warned Mulešković.
The president of the Association of Managers (AMM), Budimir Raicković, said that this draft has yet to be analyzed. However, he warned that the state has been the largest employer for years and that the costs of an administration that does not provide quality service to citizens and the economy are constantly increasing.
– The economy non-stop finances the costs of public administration and the tendency of anti-entrepreneurship has been developing for years, because it is more profitable to go to a state job – said Raicković and added that the fact is that now it is better and more profitable to be employed in the state administration, than in a private job.
He stated that for years employment in the public administration has been increasing and entrepreneurship and employment in the private sector and private initiative have been discouraged.
– This is a sore spot for Montenegro – Raičković warned and added that Montenegro is slowly transitioning from a proportional to a progressive tax system “and for small countries the tax attractiveness is significant”.
The warnings were joined by the Montenegrin Association of Employers (CUP), which assessed that this measure will certainly have incalculable harmful consequences for the economy, and thus for the entire society. Especially if you take into account the state of the Montenegrin economy and the extremely complex and not at all optimistic situation in the world. They believe that the adoption of this serious measure in such complex circumstances is surprising.
– CUP will carefully consider the content of the draft law at the extraordinary session of the Board of Directors, analyze its provisions in detail and then go public with its views – said CUP.
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