(Podogrica, 4 June 2013) – If the Government of Montenegro collected some of the debts that the country’s largest companies have towards the state budget, the decision to increase the VAT would be senseless given that the tax-arrears of these companies eclipse the amount that would be collected by increasing the VAT to 19%.
According to the latest financial report of the Electric Power Company of Montenegro (EPCG), the company owes €11.3-million in payroll contributions, as well as €2.7-million in corporate taxes. The EPCG’s report also notes that the company’s customs arrears stand at €22.6-million. This exceeds the total amount of €35-million in arrears that was owed last year to the government, but that also wasn’t paid thanks to the government’s leniency.
Instead of filling budgetary gaps – the product of state guarantees for the Podgorica Aluminum Combine (KAP) – by demanding that those with the largest arrears pay on time, the Government decided to shift the entire burden of saving this factory and paying the debts’ of private investors onto citizens by introducing the so-called “tax for KAP.”
MANS has been consistently underlining for the Government of Montenegro that, as an alternative to the brutal stuffing of its hands in the pockets of the country’s increasingly impoverished citizens, there are other ways to fill the budget (especially by ensuring that tax arrears are paid on time). The example of the EPCG is the most extreme indication of what the government allows. While trying to save one tycoon, the government is also shielding another tycoon firm from its legal obligations by shifting the entire burden onto the shoulders of the citizens.
Unfortunately, this isn’t the only example of such behaviour, since the Government hasn’t succeeded in ensuring the payment of tens of millions of euros in arrears, which would have helped avoid the VAT increase (affecting all Montenegro’s citizens). Additionally, the Government could avoid additional indebtedness with the international financial institutions under unfavorable conditions and in amounts that will have to be returned by entire generations of still unborn future citizens. Thus the payment of the customs arrears of the ten biggest debtors to the Customs Administration would totally render meaningless the government’s arguments for raising the VAT by securing some €40-million for Montenegro’s budget.
