Timely involvement and consultation of the business community when changing the tax policy would lead to the fact that the foreseen measures would be more applicable in practice, so the positive effects on the budget of Montenegro would be more certain, said the American Audit Chamber (AmCham).
They pointed out that the way of adopting new policies in the area of taxes foreseen in the draft budget for this year is not in accordance with the basic principles of predictability and business planning advocated by AmCham Montenegro, for which they received the support of Prime Minister Zdravko Krivokapić and Minister of Finance and Social Welfare Milojko Spajić.
"We believe that the ministry in charge of tax policy should not continue with the bad practice of adopting policies without the involvement of the business community that affects it, and indirectly all Montenegrin citizens," the statement added.
On the occasion of the draft budget for this year, AmCham addressed Krivokapić and Spajić in order to point out the importance of a predictable tax policy and initiate a meeting where they would discuss the key recommendations from the AmCham Report on the business environment for the period 2019-2020.
They said that in order to retain existing renowned investors and attract new ones, a safe, transparent and predictable business environment is necessary.
"As many as 61 percent of member companies rated the transparency of the decision-making process in the tax area as bad or very bad in our report. That is why we pointed out the need to improve communication regarding tax policy, all with the aim of achieving predictability as an important business factor," the announcement states.
AmCham said that frequent changes in the taxation system and tax rates introduce uncertainty, unpredictability and additional costs, and discourage current and potential investors from investing in Montenegro.
"Therefore, changes in the tax policy that should begin to be implemented from the middle of the fiscal year, without announcement or consultation, have an extremely negative impact on the business environment, since all companies have long since adopted their business plans for this year," it added. in the announcement.
As AmCham said, it should be borne in mind that these changes are taking place during the year of the COVID-19 pandemic, in which companies experience a significant drop in business income, and are forced to rationalize all costs, which ultimately affects the reduction of the level of total consumption .
Precisely because of this, any measure that leads to an increase in the price of products and services and a decrease in the purchasing power of the population, such as an increase in excise taxes, inevitably leads to an additional decrease in consumption and an increase in the gray economy, and thus a decrease in tax coverage, and in the end budget revenues.
"In this way, budget revenues are not increased, as there are examples from the recent past from our country when similar measures were adopted, but also corrected after a certain period of time", the announcement states.
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