Press release following emergency Cabinet meeti

At the emergency meeting, chaired by Deputy Prime Minister Miroslav Ivanisevic, the Cabinet discussed the draft package of measures on personal income tax and contribution relief and public expenditure cuts.

After a thorough consultation and analyses, the Cabinet found that the announced reduction in taxes and contributions was Montenegros economic policy priority.

With a view to the aforesaid fact, and considering the recommendations of the IMF and the World Bank and the actual capacity for public consumption cuts, the Cabinet found that at present personal income taxes and contributions could be reduced in to stages, on July 1st by 5% and on December 1st by another 5% plus 5%.

The Cabinet passed a decree on public consumption cuts, as part of the measures adopted in order to cover a deficit of approximately 10 million caused by tax and contribution reduction. The projected cuts in public consumption are to be executed by reducing material expenditures, public works programs and the number of employees. The adopted measures represent the groundwork for the continuation of negotiations to extend the arrangement with the IMF.

In addition, the Cabinet adopted the Draft Memorandum on Economic and Financial Policies between the IMF and Serbia-Montenegro.