Montenegro adopts amended proposal on 2013 personal income tax hike.

By bne IntelliNews January 29, 2013
The Montenegrin parliament approved on Monday, Jan 28, a temporary increase in personal income tax, under which gross monthly salaries of below EUR 720 (EUR 479 in net terms) will be exempt from additional taxation but the tax on all earnings above this limit will be raised to 15% instead of to 12% as earlier planned, state radio and TV broadcaster RTCG reported. Montenegro is trying to raise more budget revenue via provisionally lifting its current 9% flat tax on personal income, which is among the lowest in Europe. Initially the government said it wants to lift the current tax to 12% for gross monthly salaries of above EUR 400 and thus raise some EUR 11mn and cut expenditure by around EUR 5mn on an annual level. Yet, the parliament adopted an amended version of the proposal after days of negotiations between trade unions and the finance ministry and threats of public unrest. The measure should remain valid by end-2013, according to the initial plan. Some 124,000 workers will benefit from Monday's amendments to the proposal on the crisis tax, finance minister Radoje Zugic was quoted as saying by news agency Mina Business.

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