IMF mission is staying in Montenegro in order to collect current information on the state of the economy, outlooks and policies within the annual consultations under the Article 4 of the Fund Statute.

Chairperson of the Committee informed his interlocutors on current events in relation to the previous visit of the Mission, two months ago. At the meeting they discussed current economic situation, fiscal risks, tax policy, fiscal consolidation of income and expense part of the budget and need to reduce the black market economy.

Chairperson of the Committee on Economy, Finance and Budget with IMF Delegation pointed out the following as important issues: manner of budget deficit reduction; situation in the Aluminium Plant AD Podgorica (KAP) and the fiscal risks that stem from operation of this company, with emphasis that the adopted conclusions eliminate the possibility to have the termination of contract expenses switch as expenses to the budget; as well as combating the black market economy.

He pointed out that there is room for taxation of payment transactions under the tax policy. In order to reduce budget expenses, he concluded that, among other things, there is need to re-examine the level of expenses for salaries, especially in state enterprises and institutions, companies with state as the major stakeholder, and local self-governments. With regard to the announced increase of the VAT, Mr Aleksandar Damjanović concluded that only after exhaustion of a great number of options that exist in the tax space, such as collecting tax debt which is at the level of 350 million euro and expanding tax reach, this should be taken into account as a measure of last resort.

Additionally, he pointed out that the Proposal for the Law on prevention of illegal business operations is underway in the parliamentary procedure and emphasised that the Law on Budget and Fiscal Responsibility had not yet been established. Under this law excessive borrowing and giving guarantees is limited, which may hinder the implementation plan of this law starting next year.

They also exchanged positions regarding strategic investment and infrastructure projects in Montenegro and it was pointed out at the significance of investment in the energy sector for the total progress of Montenegrin economy.