An additional increase in VAT and excise taxes will not only lead to a large increase in the inflation rate, but will also not have the desired financial effects on the budget, the deputy president of the Social Democratic Party (SDP) Petar Odžić is convinced.
Odžić said that raising tax rates is always accompanied by a lower collection percentage, so we will see an increase in the prices of all products, and in the budget, on the other hand, we will not achieve the effect and replace the already missing funds.
"We already have a higher VAT rate than Croatia, which is a member of the EU, and of course the inflation rate is much higher. So we waited for prices in Montenegro to exceed prices in European metropolises.
We must not allow these impositions to "patch the holes" of populist measures," he said in a statement sent to the media.
Odžić pointed out that the season showed that raising the VAT in tourism immediately leads to an enormous jump in prices, which means that we cease to be competitive on the market, so we get the effect he mentioned: higher prices, but less money in the state budget, which according to him is the product of a very bad season.
"The return of VAT to seven percent for all caterers would enable Montenegro to be more competitive, but also better fill the budget through much better seasons," he concluded.
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