Response by PM's Adviser Radoje Žugić to Minister of Finance's claims that tax debt grew due to alleged VAT exemptions in previous period

Podgorica, Montenegro (15 Spetember 2016) – In its previous term, the Government never exempted anyone from paying VAT unless it was done in the Parliament and had the force of law. Therefore, it cannot be the cause of the growth of the tax debt, because that tax is not cut or determined.

The greatest increase in the tax debt is caused by the failure to adopt the amendments to the Criminal Code related to the payment of net earnings without the public revenues on earnings. The public became familiar with the fact that the reason behind this is the vote of the former Speaker of the Parliament. And the cause of the growth of the tax debt should be sought there.

No one can know exactly what the amount of the tax debt is, because it largely depends on the taxpayers and their timeliness. When the Tax Administration in the previous mandate strengthened its control function, tax debt raised sharply because legal entities submitted returns and did not conducted payments. In 2013, 2014 and 2015, we had an average growth of public revenues by 17 percent compared to 2012 and economic growth of about three percent. The question is – where this difference of 14 percent came from if it is not caused by economy growth and, among other things, by increased collection of the tax debt in those years.

Dr Radoje Žugić, Prime Minister's Adviser