Moody's, Montenegro's FinMin discuss fiscal position, plans to keep VAT at 17%.

By bne IntelliNews May 4, 2012
At a meeting with Moody's representatives on May 3, finance minister Milorad Katnic discussed current economic and fiscal developments in Montenegro and government's efforts to retain the VAT rate at its current level (17%) in the context of the revised fiscal plan for the year, according to a press release of the finance ministry. We recall that the country had to update its budget forecast after already in the first months of the year it became evident that the initially projected budget gap of 1.05% of GDP will be definitely exceeded. To bring additional revenue to the budget the government approved introduction of new taxes, such as tax on SIM cards, cable TV, electricity metres and smoking zones, as well as a rise in excise duties on heating oil and gas. Following the meeting, it has been concluded that Montenegro is one of the few countries in the region to actively undertake structural reforms in the area of pensions, labor market and social policy. The purpose of Moody's visit is linked to the assessment of Montenegro's credit rating. The agency will collect data and evaluate the economic, fiscal and financial situation in the country.

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