Montenegro tax administration grants debt reprogramming to local government units

The Tax Administration of Montenegro issued 55 decisions to allow municipalities, public enterprises, and institutions to repay tax debts in installments.

These decisions cover a total of 78 million euros, which includes 54.3 million euros in principal debt and 23.7 million euros in calculated interest. Since the new law took effect on December 30 of last year, authorities have collected 1.2 million euros under these specific arrangements.

The Ministry of Finance introduced the new law to help local government units settle overdue taxes and ensure regular payments of future obligations without taking on additional debt. The law allows entities to spread their debt over up to 120 equal monthly installments, provided each payment is at least 1,000 euros. If the debtors follow the payment plan, the administration can waive existing interest and procedural costs.

However, if a debtor fails to pay regularly, the administration can cancel the agreement, recalculate interest from the original debt date, and begin forced collection. According to the Tax Administration, the current overdue tax debt for these local entities stands at approximately 35 million euros. The community of municipalities stated that the measure aims to stabilize local finances and ensure the continued operation of public services.

They estimate that the law could generate approximately 7 million euros in additional annual revenue for the state, totaling about 70 million euros over the next decade.