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Press release from 143rd Cabinet session
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Press release from 143rd Cabinet session
Published on: Nov 16, 2019 • 12:00 AM Author: PR Service
At its 143rd session, chaired by Prime Minister Duško Marković, the Montenegrin Cabinet adopted the Draft Law on the Budget of Montenegro for 2020.
The proposed budget foresees a total amount of income of EUR 2,578,920,000.
The characteristics of the 2020 budget are:
- Continued intense economic growth through a projected real growth rate of 3.4 percent in 2020, with a stable outlook in the medium term;
- Significant growth of the budget revenues as a result of growth of economic activity, implementation of fiscal consolidation measures and expected effects of the implementation of the project "Economic Citizenship" and giving the "Airports of Montenegro" for long-term use;
- Record economic growth rates and improving fiscal position have created the conditions for increasing current budget spending in order to create the conditions for: improving the standards of employees in particularly important sectors - education and health (planned income increase of 9 percent in 2020 and an additional 3 percent in 2021), increasing appropriations for financing the provision of public health care services and creating the conditions for financial sustainability of the national airline Montenegro Airlines;
Despite the aforementioned increase in costs, the current budget surplus in the amount of EUR 180 million or 3.6 percent of GDP will be realised in 2020, as well as the primary surplus at 1.1 percent of GDP;
- Through the Capital Budget, investments in the implementation of projects improving public infrastructure and tourist offer are continued, with the continuation of the construction of the priority section of the Bar-Boljare motorway;
- Positive fiscal consolidation results in the previous period made it possible to reduce the budget deficit from 5.8 percent in 2017 to the planned 0.99 percent in 2020;
- The issue of Eurobonds in 2019, in the amount of EUR 500 million, under the most favourable conditions so far, provided funds for repayment of debt due in early 2020 and thus prevented any risks and adverse developments in the international capital market related to financing of commitments in the next budget year;
- The tax burden on labour will be further reduced by eliminating the so-called crisis tax, i.e. the return of a proportional tax rate for all income levels;
- Conditions have been created for the continuation of the optimisation of public administration through the payment of severance pay to employees with a consensual termination of employment.
The proposed budget reduces non-productive expenditures such as business travel, representation, fuel and procurement of official vehicles for all departments except those whose basic function is related to these categories of expenditures, which primarily relates to: inspection services, field work, etc.
The Cabinet adopted Macroeconomic Indicator Projections for the period 2019-2022. The projections are made according to the new macroeconomic model in accordance with the latest available data, and the document also contains an overview of external factors that influence the growth projections and the starting assumptions for their realisation. The discussion pointed out that, based on the available indicators and expected developments in the second half of the year, the real growth rate for 2019 is projected at 3.1 percent, while for 2020 the real growth is projected at 3.4 percent. In addition, the estimated employment growth in 2019 is 2.8 percent, nominal wages 1 percent, real wages 0.5 percent, while the estimated average inflation is 0.5 percent.
The Cabinet adopted the Draft Law on ratification of the Convention on Mutual Administrative Assistance in Tax Matters. This law facilitates the implementation of the Convention in order to assist States Parties, by exchanging information automatically and spontaneously on request, assisting in the collection of foreign tax claims and the submission of documentation, and provides a legal basis for international cooperation and exchange of information on taxpayers, for efficient combating tax evasion.
The Draft Law amending the Law on International Restrictive Measures has been passed. The amendments relate to compliance with the Decree on the Organisation and Mode of Operation of the State Administration, on the basis of which the Directorate for the Prevention of Money Laundering and Terrorism Financing ceased to exist as an administrative body, and its responsibilities were entrusted to the Police Directorate - Sector for Prevention of Money Laundering and Terrorism Financing.
In order to ensure the implementation of the Law on Food Safety and full compliance with the legislation of the European Union, a Regulation was adopted amending the Regulation on the maximum levels of contaminants in food.
The Cabinet passed the Decision on the amount of the license fee for commercial fishing and aquaculture. The fee is fixed on an annual basis, for issuing a license for commercial fishing, depending on the amount of fishing tools and equipment used for fishing, and for issuing a permit for aquaculture, depending on the surface and type of fish and other aquatic organisms.
The Cabinet decided to extend the special gambling concession of Casino Royal Splendid at the Splendid Hotel, and accepted the Concession Agreement. This decision extends the concession for special gambling at Casino Royal Splendid for a period of 5 years, starting on 15 February 2020.
An amendment to the Draft Law on the Final Account of the Budget of Montenegro for 2018 has been passed. In accordance with the recommendations of the Report of the State Audit Institution, adjustments were made relating to the increase in outstanding liabilities from the previous period and the correction of the modified cash deficit.
The Cabinet adopted the Information on the Implementation of the Conclusion of the Government of Montenegro, No. 07-5936, dated 24 October 2019, and adopted the Agreement on the Implementation of the Programme "Environmental Protection Projects" - the project Implementation of Pollution Reduction and District Heating for Pljevlja. The Municipaliy of Pljevla spent EUR 130,000 on pellet procurement and distribution and will spend the remaining funds in the amount of EUR 720,000 on the implementation of projects related to environmental improvement. As pointed out in the discussion, further activities on the implementation of projects related to environmental improvement will be carried out by the Municipality of Pljevlja, and will be financed by the Public Works Administration.
Pursuant to the Law on Public Administration, which stipulates that the Secretary of State is appointed and dismissed by the Government, at the proposal of the Minister, without a vacancy, and that his duty ceases upon termination of the Minister's term, and bearing in mind that the Parliament of Montenegro confirmed at its session from 14 November 2019 the termination of the Sustainable Development and Tourism Minister's term of office, the Cabinet dismissed: Damir Davidović, Jovan Martinović and Saša Radulović as State Secretaries in the Ministry of Sustainable Development and Tourism due to the termination of the Minister 's term of office.
Coordination of the Ministry of Sustainable Development and Tourism was taken over by the Prime Minister. State Secretary Damir Davidović and former Prime Minister's Adviser for Sustainable Development Dragana Čenić have been appointed as State Secretaries.
The Cabinet accepted the Information on the implementation of the Put Option Contract between A2A and Montenegro. The realisation of the Agreement so far has resulted in a new ownership structure, i.e. the fact that the State's share in EPCG has increased from 57.1 percent to 85.4 percent, EPCG owns exactly 10 percent of its own shares, the A2A share has been reduced to only 3.2 percent, while other shareholders retained the previous share of about 1.2 percent.
Since it is agreed that the remaining A2A shares will be acquired by either the State or EPCG by the end of the year, and that EPCG currently owns a maximum of 10 percent of its own shares, it is necessary for the State to take over the remaining shares. The budget projections for 2019 provide that the part of the state's investment from May of the current year in the amount of EUR 35 million will be fully repaid on the basis of dividend payment to EPCG shareholders. This practically means that the purchase of the remaining A2A shares will increase the associated dividend and generate additional budget revenue.
The Ministry of Finance is obliged, in order to realise the last tranche of the Agreement, on the basis of the purchase of securities, to take from A2A 3,202,845 shares for the amount of EUR 14,333,637.24 by 30.11.2019 at the latest and - 636,793 shares for the amount of EUR 2,849,828.78 by 31 December 2019 at the latest. The Ministry of Economy is responsible for ensuring, in cooperation with the representatives of the state capital in the EPCG, the distribution of the retained earnings of the EPCG by 15 December 2019 at the latest, which will provide the state budget with revenue of at least EUR 37,407,272.11.
The Government approved the Proposal for payment of compensation for the communal furnishing of construction land by construction of communal infrastructure, construction of communal infrastructure in the scope of DSL Sector 38 - Bigova and LSL Trašte and payment of additional costs borne by Bigova Bay. Bigova Bay Company is the majority owner of the land on the Trašte Peninsula with a total area of about 900,600 m². The aim of the company is to build the highest category tourist complex on the peninsula, in the form of luxury 4+ and 5-star hotels, whose accommodation capacities will amount to 1,186 beds according to planning documents (478 in hotels and 708 in villas). According to investor estimates, the amount of investment in this tourist resort is over EUR 200 million.
PUBLIC RELATIONS SERVICE OF THE GOVERNMENT OF MONTENEGRO
PHOTO AND VIDEO: https://flic.kr/s/aHsmJntkDS
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