New report on parafiscal charges and burdens

12 recommendations to Government to improve business environment in Montenegro

News | 07 December 2017
(ILO-Budapest) The Montenegrin Employers Federation (MEF) presented their new strategic paper ”Report on Parafiscal Charges in Montenegro” produced in cooperation with the International Labour Organization. The paper presents the findings of a survey carried out at national and local level identifying more than 1500 parafiscal burdens at the national level and on average an additional 200 at the local level. The report includes recommendations on how to consolidate and reduce the number and the costs of the existing parafiscal charges in Montenegro.

Parafiscal charges are taxes or administrative duties on a specific product or service, usually paid to a public authority other than the national tax authority. In Montenegro, examples are tourist tax, tax for usage of commercial properties, advertising the business, road usage, tax for temporary use of public land and various administrative taxes.

The MEF conducted a survey among 300 employers in the three regions of Montenegro, and polls and interviews with 23 local governments the Union of Municipalities. The survey revealed that:
• 85% of businesses think that parafiscal charges are high in the country.
• There are big differences among the parafiscal charges respective local governments levy.
• Almost 80% believes that parafiscal charges with the procedures involved may influence enterprises to opt for operating in the informal, rather than in the formal sector.
• Starting a business implies excessively heavy charges.
• 94% of respondents thought it is necessary to create a register of parafiscal charges and undertake their reform.

Based on the survey results, MEF will present 12 recommendations to the Government of Montenegro with an aim of regulating parafiscal charges and lowering their burden on businesses.