The government expects that next year it will receive 2,2 billion euros from taxes, i.e. 253 million more than this year, and that this will be enough to compensate for the loss due to the halving of the pension insurance contribution through the "Europe Now 2" program and cover the deficit of the Pension and Disability Insurance Fund of EUR 380 million, the representatives of the Government announced yesterday at the conference on the budget proposal for the next year.
The government has not yet published the risk analysis and scenario analysis of this tax reform program, although they are mandatory documents that should prove that such changes are sustainable and what measures would be possible in the event of a negative scenario. These analyzes are not even in the Fiscal Strategy, which has still not been adopted even though almost all the laws it foresees have been passed.
The World Bank, the International Monetary Fund and the European Commission have been warning about these risks and the lack of analysis for months.
"I guarantee that the 'Europe Now 2' program will be sustainable and that the budget will not be threatened," said the Prime Minister Milojko Spajic yesterday when asked by "Vijesti" why there is still no risk analysis and who guarantees that these changes will be sustainable and that no additional measures will be needed for the stability of the next year's budget.
Risk analysis in January
Chief of Cabinet of the Prime Minister Branko Krvavac he said that the risk analysis of the tax reform program "Europe Now 2" will be done with the Program of Economic Reforms (PER) 2025-2027. year in January of the following year. This means that the risk analysis will be known only when all the laws and the budget are adopted and their implementation begins, even though it was supposed to be the basic document.
PER is updated every year and sent to the European Commission, which requested additional analyses.
"Europe now 2" implies a reduction in contributions from 20,5 to 10 percent, an increase in the minimum wage, but also the VAT rate from seven to 15 percent and the excise tax for some products and services, as well as an increase in various fees, taxation of game winnings on luck, a measure to suppress the gray economy,...
The total original revenues of the budget are predicted at 2,88 billion euros, and original expenditures at 3,16 billion. So the budget deficit is 278 million euros, and another 820 million euros will be needed to repay the previously taken loans, so the total missing money in the state coffers amounts to 1,14 billion euros. It is planned to be secured by a new debt of 885 million euros, as well as by using the remaining deposits of 240 million euros that come from the state's debt from March of this year.
Debt limit up to 2,8 billion
In its budget proposal, the government asks the Assembly for approval of four debt programs totaling up to 2,8 billion euros.
"In 2025, the state can conclude a credit arrangement with the European Union, represented by the European Commission, in the amount of up to 275.000.000 euros, for the implementation of the European Union Instrument for Reform and Growth... In addition to the credit obligations from paragraph 1 and paragraph 2 of this member, in 2025, the state can borrow for financing projects, through credit arrangements, in the amount of up to 1.129.000.000 euros.... In 2025, the state can borrow in the amount of up to 900.000.000,00 euros for security purposes of missing funds in 2025... Exceptionally from paragraph 3 of this article, the state can borrow up to EUR 2025 in 500.000.000,00 for the purposes of debt refinancing and creation of fiscal reserves for 2026 and 2027. ", it is stated in articles 13 and 14 of the bill on the budget for 2024.
Prime Minister and Minister of Finance Novica Vuković they spent most of yesterday's press conference to show that "Vijesti" was wrong when they stated that the Government is asking the Assembly to approve debt limits for the deficit and investments of 2,3 million euros (when the article was written, the position was not known another 500 million is also requested for debt for the fiscal reserve).
Everything that "Vijesti" published four days ago is in the budget proposal that was published yesterday.
Spajić said that journalists should read and transmit data only from the first page of the budget proposal.
The Prime Minister recommended journalists not to publish headlines in which "something is lacking in the state"...
"The state is not missing anything," he said at the press conference.
He said that the state will not borrow that much, but that any debt would be for returning old obligations and capital investments.
"If we could borrow cheaply, I don't know why we wouldn't do it," Spajić said.
Vuković stated that these other debit items exist as optional.
"We have projects with the European Union that we had to list, but for which we cannot know whether they will be realized in the next year. If money is received for these projects, he will enter into debt as he retires," Vuković said.
Half the budget from VAT with a growth of 15 percent?
Projections of the public debt trend, which are listed in the budget, estimate that the net public debt at the end of this year will amount to 4,27 billion or 57,6 percent of GDP, as well as that it will continue to grow next year, so that in the end in 2027, amount to 5,5 billion euros or 62,88 percent of the estimated GDP for that year.
Value added tax (VAT) is almost half of the original budget revenues for the next year, from which the Government expects 1,37 billion euros in the next year, which is 173 million or 15 percent more than this year. The government expects to achieve this increase in VAT collection through an increase in the average rate on some products and services, an increase in household consumption due to the increase in wages and pensions, as well as through measures to suppress the gray economy.
Excise taxes are expected to generate 403 million euros or 38 million more than this year, income from corporate income tax is expected to be 220 million or 14 million more, from personal income tax 108 million or 22 million more...
Five percent more for pensions
Income from pension insurance contributions is planned to be 397 million euros, while 777 million euros will be needed to pay all pensions, so the deficit of the PIO Fund is 380 million. Revenues from contributions are 143 million less than this year, while pension expenditures have increased by 40 million or about five percent more than this year.
The Government previously announced that all pensions will be increased by seven to eight percent or by 50 to 60 euros from January. After the January adjustment of pensions with earnings and inflation, they must take place in May and September. So this increase in the amount for pensions is less than expected.
A tiny increase for social benefits
221,5 million euros are planned for the payment of social benefits in the next year, which is 9,5 million or 4,4 percent more than this year.
For children's allowances, the amount was increased from 53 to 55 million or 3,7 percent more. For material security, which according to the law is given to the poorest citizens who have no other income or property, the item is increased from 10 to 10,5 million. For other people's care and assistance, the item increases from 72 to 77 million euros or 6,9 percent.
The amount for benefits for veterans and disability protection increased from 5,5 to 5,8 million or by five percent, for maternity leave from 35 to 36 million, for the support of residents in homes from 6,7 to 7,2 million,... and for other rights in the field of social protection, the total amount remained at the same amount of 29 million.
The item for one-time social benefits was halved from 2,8 to 1,9 million euros.
49 million more for salaries in the administration
The amount for the net earnings of employees in the state administration increased from this year's 515 to 564 million euros, that is, by 9,5 percent or 49 million euros.
The amount of 24,3 million euros or 4,5 million more than this year is foreseen for other personal incomes of employees (various benefits in addition to wages).
The item for the payment of employees in the state administration who are engaged under a work contract in the budget for the next year is foreseen in the amount of 16,6 million euros, which is about five million less than this year.
For the payment of trainees, the item was increased from 12 to 15 million euros.
More money for travel and honors
The amount for official trips of the Government Administration increased from six to 8,2 million euros or by 36 percent, while the item for national teams increased from 653 to 1,03 million euros or by 57 percent.
The item for official telephones and other communication services increased from 5,9 to 6,6 million, for lawyer and notary services from 7,2 to 9,5 million, for transportation services from 1,1 to 1,55 million, for professional training from 2,2 to 2,8 million,...
The amount for consulting services, projects and studies increased from 34 to 45,5 million euros. A possible reason for the increase in this item is that the Government wants to hand over more projects to European Union funds, and the EU requires that they be presented and prepared in detail.
A third of the capital budget for the start of the new highway section
Capital expenditures are foreseen in the total amount of 357 million euros, which includes an item of 100 million euros for the start of the construction of the Mateševo - Andrijevica highway section, as well as 34 million euros for the purchase of securities.
A sum of 140 million euros has been earmarked for infrastructure of general importance, including the freeway, leaving 40 million for other projects.
In the budget for this year, that item amounted to 92,5 million euros, excluding the highway, so the budget for general projects was reduced in this section.
Among the significant capital projects that will be started in the coming year is one million euros for the preparation of documentation for the University Clinical Center in Podgorica, which would cost a total of 200 million euros in the coming years. Two million euros are also planned for the start of the construction of a general hospital in Pljevlja, which will cost a total of 40 million...
3,3 million have been earmarked for the reconstruction of the prison in Spuz, five million for the continuation of the construction of the Tivat - Jaz boulevard, five million for project documentation for sections of highways and expressways...
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