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MEF presented Report on Parafiscal Charges in Montenegro

News 24/11/2017
MEF presented Report on Parafiscal Charges in Montenegro

A new strategic paper of MEF - a Report on Parafiscal Charges in Montenegro has been presented at today’s event named “Strong Economy – Prosperous Montenegro” jointly organized by Montenegrin Employers Federation and International Labor Organization. In addition to the outcomes of the survey about the state of affairs at national and local level, the document contains recommendations on how to consolidate and reduce the number and/or the costs of the existing parafiscal charges in Montenegro.

The event was officially opened by MEF President, Svetlana Vuksanovic and ILO Director for Central and Eastern Europe, Markus Pilgrim. MEF President said that even if MEF was well aware of the recent reform processes, the Government should not neglect problems and business barriers employers are pointing to. “Otherwise, we may face economic structure disorder that would have negative impact on all other societal segments which is something we definitely cannot afford at the moment”, said Svetlana. “It is high time that we commit to activities that lead to reaping the deserved benefits. Current processes could be much more effective if they included cooperation with businesses and meeting business community interests”, she added.

Markus Pilgrim put an emphasis on three key messages in this regard. “The first one is that you should not underestimate the importance of enabling business environment for new jobs creation…in other words – you have to create the environment where all companies, regardless of their size, have equal opportunities to thrive (…). The second message I want to convey relates to taxes and burdens (…) the problem is not only with the amount of burdens but also in their complexity (…). What we need is smart regulation”, said Pilgrim. Lastly, he pointed out the necessity of consulting social partners when creating laws and regulations. “It is the only way to make them right”, he concluded.

Following the introductory addresses, a Head of Department for International Affairs at MEF, Mirza Muleskovic, and Djordjije Blazic, an external expert in the survey, presented the outcomes of the comprehensive survey MEF conducted among 300 employers in all three regions of Montenegro, while polls and interviews involved representatives of 23 local governments and Union of Municipalities of Montenegro. The sample was created in accordance with MONSTAT data and the questionnaire in close cooperation with ILO. MEF survey revealed that as much as 85 per cent of businesses consider that the amount of parafiscal charges is high. According to a large number of respondents, there are substantial differences in amount and number of parafiscal charges among different local governments businesses operate in. As much as 79.9 per cent of businesses think that the amount and number of parafiscal charges, and administrative procedures they involve, influence enterprise’s decision whether to do business in formal or informal sector. In addition, as much as 81.5 per cent of respondents highlight that the amount of parafiscal charges hampers the starting up of business. According to businesses, local governments do not consult them when making decisions. The largest number of respondents - over 94 per cent of them, thinks that it is necessary to create a register of parafiscal charges and undertake their reform.

The next session involved panel discussion on cooperation between public and private sector. Views on this topic were shared by: Nina Vujosevic, a State Secretary at the Ministry of Finance, Zoran Tomic, a Secretary at the Ministry of Sustainable Development and Tourism, Branislav Djuranovic, a President of the local government of Danilovgrad, Goran Djurovic, a MEF Executive Board Member and an owner of Cerovo company and Hasan Ramovic, a MEF Executive Board Member and an owner of Put Gross company. A State Secretary, Nina Vujosevic, said that the report they were presented was very useful as well as that the recommendations to define and eliminate many fees and charges were in line with Government’s intentions for the coming period.

Today’s ILO-MEF event has been organized in the frame of the project “Moving from Informal to Formal Economy” financed by the ILO and aimed at involving relevant stakeholders in current reform processes that are directed towards creation of enabling environment for sustainable enterprises, investment growth, strengthening competitiveness, employment growth and socio-economic development of Montenegro. Montenegrin Employers Federation will send 12 recommendations to the Government with an aim of regulating the collection of parafiscal charges and lowering the burden on businesses.

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