The total number of labor, market and tax inspection controls will be increased by 50 percent, and the amount of imposed fines by XNUMX percent in the next two years.
Inspectors will be able to enter apartments and houses if they suspect undeclared trade and services, and will also control ads on social networks, it was stated in the Reform Agenda as new government measures in the fight against the entire economy.
The government adopted the reform agenda in September and the document was approved by the European Commission ten days ago, and the money that Montenegro should receive from EU funds will depend on the fulfillment of the promised goals. Since the EC gave its consent to this document, it also means that all the measures stated in it are in accordance with EU norms.
By December 2025, amend four laws
The government has committed to adopt a whole set of laws related to inspection supervision, prevention of the informal economy (gray market), as well as amendments to the law on misdemeanors and the Criminal Code, in order to reduce the gray economy.
The aim of those changes, as stated, is to improve the legislative framework and focus the inspection and tax authorities on combating the gray economy.
"Adopt and implement amendments to the Law on Misdemeanors, the Law on Inspection Supervision, the Law on Prevention of Illegal Business, as well as the Criminal Code of Montenegro, in order to strengthen supervision over inspectors (including the right to enter residential premises where unregistered activities are suspected), introduce appeal procedures, abolish their territorial competences, remove the possibility of discretionary decisions and ensure the fulfillment of prerequisites for a systematic fight against the informal economy", it was stated in the part of the agenda that lists the necessary procedures (steps) that should be done by December 2025.
By the end of this year, the plan is to improve integrity in all inspection services, that is, to introduce a mandatory annual declaration of assets and declarations of conflict of interest for inspectors, which will be subject to checks by the Agency for the Prevention of Corruption.
It was announced that the inspections will be conducted according to the principle of a risk-based sectoral approach. The sectors with the greatest risks for the gray economy and irregularities are listed as construction, games of chance, tourism and agriculture, where 75 percent of inspection controls should be performed.
The Tax Office knows about trade in apartments, but it is not competent
The document states that the Tax Administration is "familiar with the fact that unregistered business entities are operating illegally, hidden from the law and control, avoiding paying all taxes and other duties - which makes their products cheaper, but also of less quality and safety", as well as that most unregistered activities - trade, services... are carried out in private apartments and houses that she cannot control.
"Performing any activity, which includes production, trade or provision of services without prior registration, constitutes informal business. This category often includes services provided by painters, plumbers, electricians, parquet floors, hairdressers, beauticians, masseurs, persons engaged in the production and delivery of food (catering), online merchants (sales via Facebook and other social networks), as well as services provided by travel agencies, tour guides, companions or animators, providers of beds and rental apartments owned by domestic and foreign natural persons, providers of beach furniture, ski equipment, rafting services, adventure services, services in nautical, rural, health and sports tourism", it was stated in the Agenda.
The document points out that it is difficult to estimate the amount of undeclared income from trade and services that take place undeclared in apartments and houses, because they are private properties.
"Any person who is found to be carrying out an undeclared activity is subject to the application of criminal provisions. However, in accordance with the current regulations, inspection procedures under the jurisdiction of the Tax Administration could not be carried out in private premises, that is, on private property, of persons subject to supervision, without a previously obtained court order. Bearing in mind that this situation limits the efficiency of the inspection in detecting and sanctioning illegal business, these are the initiated changes to the Law on Inspection Supervision, which would enable the inspection to carry out an inspection in a residential area, in the case when there is an indication that an activity is being carried out there misdemeanor", it is stated in this document.
More money for infrastructure, education...
Suppression of the gray economy, as explained, is of great interest to public finances, citizens, employers and trade unions.
"For public finances, this is a very important segment because it represents a good way to increase budget revenues, and therefore greater opportunities for financing expenditures such as infrastructure, education, culture and others. Citizens have a direct and indirect influence on the suppression of the informal economy. The direct impact is that they can support the public sector for the implementation of measures to suppress the gray economy, and the indirect impact is through the use of benefits from the suppression of the informal economy, primarily through a larger budget and opportunities for greater allocation of funds for infrastructure, education, culture... Private the sector is of great interest, for the reason that solving the issue of the gray economy will contribute to the reduction of unfair competition, which business associations have often pointed out as one of the key barriers to the functioning of the economy. Also, the trade unions are strongly interested in the implementation of the suppression of the gray economy, primarily because of the protection of the rights of workers and the payment of obligations to employees in full," the document states.
Three steps and the inspectors will be able to enter the apartments
The crucial measure on which the expectation of reducing the gray economy is based - allowing inspectors to enter private properties, is planned to be made possible through changes to the Criminal Code, the Law on Misdemeanors and inspection supervision.
"The right to enter an apartment or other residential premises requires a court decision. The only exception when an authorized police officer can enter someone else's apartment and other residential premises, and, if necessary, conduct a search, is prescribed in Article 83 paragraph 1 of the Criminal Code, and refers to specially defined situations, among other things, when the owner of the apartment requests it, and in order to prevent the commission of a criminal act. By amending the Law on Misdemeanors in the part that refers to measures to ensure the presence of the accused and the smooth conduct of the misdemeanor proceedings, it is necessary to prescribe the competence of the Court for Misdemeanors so that, if there is a reasonable suspicion that a certain person has committed a misdemeanor, the Court can issue an order to enter residential premises premises where there is a suspicion that unregistered business activities are being carried out," the document states.
The amendment of this provision, as expected, will enable inspectors to exercise their competence in accordance with Article 144 of the Law on Misdemeanors - to issue misdemeanor warrants based on the inspection of documentation, premises and goods, and will enable them to report a potential criminal offense in accordance with Article 266 of the Criminal Code (illegal dealing business, banking, stock exchange and insurance activities).
"Representatives of the tax authority will participate in the work of working teams/groups formed in order to prepare changes to the legal regulations that will contribute to the reduction of the informal economy." The deadlines for amending the legislation are determined by the Action Plan, which is an integral part of the Program for Suppression of the Informal Economy in Montenegro 2024-2026. After the Law on Misdemeanors is amended, in the manner mentioned above, amendments to the Law on Inspection Supervision will begin in order to prescribe the powers of inspectors, that in cases where there is a suspicion that a person is engaged in illegal business, i.e. where there is suspicion that unregistered economic activities are being carried out, they can enter the apartment, i.e. private premises, for the purpose of inspection supervision", it was stated in the Reform Agenda.
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