Prime Minister's Economic Policy Adviser Milena Milović discusses Europe Now 2 Programme

Roundtable on the Fiscal Strategy for the period 2024-2027

The Europe Now 2 Programme is a tax reform that includes two key components: reducing the tax burden on labour and increasing the minimum and average wages in Montenegro, stated the Prime Minister's Adviser on Economic Policy, Milena Milović.

Milović is participating in a Roundtable as part of the public discussion on the Fiscal Strategy, which is being held at the old Government building in Podgorica, organised by the Ministry of Finance.

Milović explained that the reduction of the tax burden on labour, as the most significant fixed cost for employers, involves decreasing the employee’s pension and disability insurance contributions from 15% to 10% and the employer’s contributions from 5.5% to zero percent.

The second component of this programme is the increase in the minimum and average wages in Montenegro.

Milović emphasised that the benefits of the Europe Now 2 reform apply to both employees and employers.

Employees will benefit from the increase in the minimum wage, which is proposed to be €600 for those with up to a secondary education and €800 for those with qualifications above level VI, Milović noted.

She explained that by raising the minimum wage to €600, employees achieve a 33% increase, while a minimum wage of €800 results in a 78% increase.

All employees will experience salary growth due to the reduction in employee contributions because, according to the Labour Law, employers are required to calculate and transfer this part of the tax or contributions to the employee's net salary, Milović said.

On the other hand, she added, when it comes to employers, despite the increase for all employees, all employers currently paying wages above €600 will exclusively achieve savings.

They can use these savings for further wage increases, investments, or to offset the increased wages, depending on the structure of their employees, Milović explained.

She emphasised that due to the rise in average wages and projected inflation, pensioners will see a pension increase of 7 to 8 percent starting next year.

By reducing the tax burden on labour, Montenegro will become the country with the lowest labour costs in Europe, Milović stressed.

The Ministry of Finance stated that the Fiscal Strategy presents fiscal policy measures aimed at improving the living standards of citizens, as well as enhancing the business environment and competitiveness of the economy, while maintaining macroeconomic stability.