The Ministry of Finance (MF) of Montenegro does not plan to reduce the VAT rate on fruits, vegetables and meat products, despite suggestions from the Parliamentary Committee on Economy, Finance and Budget. The MF argues that VAT is not a decisive factor in retail price formation and that its rate has not changed since VAT was introduced. They cite the example of fresh and chilled fish, where VAT was reduced to 7% in 2022, but prices still increased.
The ministry emphasized its commitment to the Fiscal Strategy, which aims to maintain stable tax rates, especially for essential goods. They highlighted previous temporary VAT cuts on flour, sunflower oil, and salt during the COVID-19 pandemic, as well as on items like eggs, baby diapers, and menstrual products. These measures cost the state millions of euros in lost revenue. In 2022, reducing excise duties on fuel cost the state about 50 million euros.
Despite these efforts, expected reductions in consumer prices were not fully realized. The government plans to continue supporting citizens’ purchasing power but within the framework of existing fiscal policy.
Economic Development Minister Nik Đeljošaj said that while reducing VAT on fruits and vegetables should be considered, it likely cannot happen this year due to the approved budget. He announced upcoming support measures, focusing on domestic products, but no new policies have been implemented yet.
Economist Mirza Mulešković stressed the need for long-term solutions beyond short-term price controls, such as greater support for domestic production and public sector cost reductions. He warned that global price increases could soon impact Montenegro.
The Parliamentary Committee concluded that more action is needed to protect citizens’ living standards, including increased support for local production and transparent pricing. They suggested that retail stores highlight domestic products and display both current and previous prices to improve consumer awareness and encourage price reductions.
