An increase in value added tax is necessary in order to reduce the state budget deficit and prevent further growth of the public debt, said Finance Minister Radoje Žugić today while visiting the working lunch of the American Chamber of Commerce in Montenegro (AmCham Montenegro).
Answering the question of the executive director of the company Domen Predrag Lešić, whether the government will abolish the current crisis taxes and measures after the VAT increase, Žugić said that in the fourth quarter of this year (October, November and December) they will consider the effects of crisis taxes and measures and that if justified, some of them will be abolished.
The President of AmCham, Svetlana Vuksanović, said that the Government should review the entire tax policy, in order to make it more functional and the business environment more favorable.
In June of last year, the government introduced a "euro by euro" tax on cards for mobile phones, electronic meters and cable television, in December, as a crisis measure, it froze pensions, i.e. did not increase them by the rate of inflation, while in February it introduced an additional crisis tax on salaries over 482 euros.
Lešić was also interested in whether the increase in the salary tax was counter-productive, that is, whether employers turned to the gray economy and paid salaries in cash.
Žugić said that they are yet to conduct such analyzes and that at the end of the year they will make a decision on whether this tax will continue to be applied. He stated that the original revenues of the state increased in the first three months, and even the collection of VAT, by 20 million, as well as that the stronger action of the state to suppress the gray economy contributed to better collection of state duties.
He stated that actions against the gray economy will continue with additional strength, as well as that it is the biggest business barrier.
"Because someone avoids paying their obligations to the state, legal entrepreneurs have to pay more. I believe that we will reduce this phenomenon and thereby make it easier for companies that operate regularly," said Žugić
Žugić believes that the budget in 2014 will not be in the red
The minister stated that he expects that there will be no deficit in the budget next year, as well as that the national debt will be maintained at this level and slowly begin to decrease. The national debt is now about 52 percent of GDP, and public debt with issued guarantees and debts of state companies is about 70 percent of GDP.
The executive director of the forwarding company Montenomaks C&L Radovan Radulović said that forwarding companies in Montenegro received a letter from the Customs Administration that they, as intermediaries, will be charged a customs debt if their clients do not do so. They were also sent a list of about 300 companies with a total customs debt of 37,5 million.
He stated that Customs interprets Article 201 of the Customs Law in a very controversial way, that freight forwarding companies are jointly and severally liable for the customs debt incurred by their clients.
Radulović said that it was a law from 2008, and that all debts had to be covered by bank guarantees, so he asked the minister how someone allowed the debt to grow to the amount of 37,5 million and did not activate the guarantees.
He also stated that all 150 shipping companies in Montenegro, together with the assets of their owners, are not worth even half of that amount and that if this debt is collected from them, they will all go bankrupt.
The minister said that he had heard about this problem and that tomorrow at the session of the commission for the fight against the gray economy, it will also be discussed, and that after the session he will announce what is agreed upon.
Savo Đurović from Porto Montenegro praised the departments of the Directorate for Real Estate and the Tax Administration in Tivat for speeding up the procedures and helping them solve the problems they have as businessmen. He said that their clients are interested in when it will be possible to register a company online and when it will be possible for investors who invest in Montenegro to obtain its citizenship.
The minister first thanked for the compliments, and as it was possible that he did not hear the question well, he said that the proposal would be possible on line yacht registration transfer to colleagues. He also said that a team has been formed that should make a decision on the possible granting of citizenship to interested investors.
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