The Union of Municipalities (ZO) believes that local authorities should advocate for state institutions to settle their obligations to municipal utility services for their services, to suspend all legal proceedings against municipalities by energy and telecommunications companies, and to postpone the payment of bills for public lighting on 90 days, with a reduction in the amount. The proposal to the Government for the upcoming package of financial and economic measures to help due to the coronavirus may be to allow municipalities a moratorium on installments for tax debt reprogramming for three months and for the same period to postpone the repayment of loans from banks and the Investment and Development Fund (IRF).
This, several "Vijesti" sources from the local level explained, is part of the suggestions that the ZO sent to the municipalities to consider before they all together make a single proposal of recommendations to the government's Working Group, which this week should confirm measures to support citizens and the economy to mitigate the economic consequences caused by the coronavirus pandemic.
"We should analyze the recommendations we received from the Community of Municipalities and then all municipalities should separately submit their proposals to the ZO on what to do. After that, the leadership of the Community will submit a unique proposal to the Government's Working Group", the sources of "Vijesti" explain.
According to "Vijesti" information, the new package of government measures should be determined by the end of this working week, and before adoption they must carry out consultations with social partners - trade unions and the Employers' Union.
On March 30, Prime Minister Duško Marković formed a working group for the preparation of proposals for a new package of measures, which includes representatives of the Government, Chamber of Commerce, ZO and IRF. It was concluded that proposals should be formulated within five to seven days and that social partners will be consulted.
Postpone taxes, reduce taxes, fees and rent
ZO's suggestion to local authorities is that municipal aid to the economy should include the postponement of the payment of personal income tax and the postponement of the payment of the personal income tax surcharge (at the request of the taxpayer).
"Postponing the payment of personal income tax is a measure that has already been introduced by the Government and which significantly affects the revenues of all municipalities, (especially from the north) to which 50 percent of the revenues are allocated on this basis. In addition, this measure will result in a smaller amount of money in the Equalization Fund, so all municipalities that use money from the fund will have significantly less income on this basis. Postponing the payment of personal income tax will logically lead to a delay in the collection of surtax as municipal income, sources explain the position of the ZO to "Vijesti".
The proposal of the ZO to the municipalities is to include the postponement of the payment of real estate taxes, namely the first installment until August 30 and the second installment until November 30 of this year, to postpone the payment of obligations based on local utility taxes and fees for 90 days.
"An alternative would be a reduction of the amount based on the local communal tax for the period in which the space on the public surface was not used due to measures (summer gardens, taxi stands, commercial facilities...). The proposal is to postpone rent payments for 90 days, and the alternative is to reduce the amount of rent for the period in which the tenant did not use the space due to the measures. Compulsory collection of tax obligations during the duration of the measures will not be carried out against the entities covered by the measures", is the essence of the Community's recommendation to the municipalities, obtained by "Vijesti".
The recommendation of the ZO for the municipal authorities is to review the planning of priorities and measures in the new situation and to do a comprehensive analysis of the impact of the epidemic on the income and expenditure plan of the municipal budget for this year.
"Suspension of the initiation of public procurement procedures, except for those that have the function of protecting the health of citizens and performing vital functions of the municipality. Rationalization of all business expenses - suspension of payments of the variable part of salary and other fees for work in commissions and administrative boards of public services. To direct the funds of the budget reserve to rehabilitate the consequences of the epidemic on the economy and social situation and to subsidize certain activities", are some of the suggestions of the ZO to local authorities.
Beran plan
In the municipality of Beran, the payment of real estate tax and personal income tax will be postponed for everyone, compulsory collection will be suspended, and the money from the budget reserve will be spent on economic and social rehabilitation.
The President of the Municipality of Berane, Dragoslav Šćekić, announced last week a proposal for a package of measures that he will send to the local parliament for adoption.
The municipality will subsidize half of the water and utility bills for three months for all citizens, as well as companies that are not working due to the current epidemiological situation, and all restaurateurs will be exempted from paying utility fees for the use of public areas for this year. For the same period, the Municipality will also pay half of the fee that registered agricultural producers pay for using the green and dairy market.
For three months, the municipality will not charge fees for access to commercial facilities to citizens and companies whose activity is hospitality, hairdressing, beautician, and for that period rent for renting space will not be charged to citizens and companies that had to stop their business.
"Registered agricultural producers, as well as those who start agricultural production in 2020, are exempt from real estate tax. Taxi license fees for 2020 are being waived for all taxi associations and entrepreneurs operating taxi transport on the territory of the municipality," the municipality announced.
Yesterday, the URA civil movement sent the municipal authorities proposals for measures to help citizens and the economy, which are similar to what the Municipality of Berane announced that it plans to do.
Support companies that do not lay off workers
Representatives of the Central Bank, the IRF, the legislative and executive authorities, the association of businessmen and the bank association concluded at the meeting yesterday that the banking system has so far "strongly responded to the biggest challenges" caused by the impact of the pandemic on the Montenegrin economy.
This was announced by the CBCG after a meeting initiated by that supreme monetary institution.
"One of the messages from the meeting is that we should support all companies that do not lay off employees, regularly pay taxes and contributions, have a good history of cooperation with banks, but also those that have potential for growth. It is necessary to support the liquidity of small and medium-sized companies, especially is a sensitive sector of tourist services, which is threatened, but also a guarantor of GDP growth because the pandemic will not last indefinitely," said the Secretary General of the Association of Banks, Bratislav Pejaković.
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