Montenegro’s shift towards a comprehensive digital tax administration is facing significant hurdles, as the implementation of the Integrated Revenue Management System (IRMS) uncovers deeper inconsistencies within the country’s regulatory framework. The recent discussions held by the Chamber of Economy of Montenegro alongside the Tax Administration highlighted that issues related to IRMS extend beyond mere technical difficulties, impacting legal certainty, operational efficiency, and corporate competitiveness.
The IRMS was introduced as part of a larger initiative aimed at modernizing tax administration through full digitalization. Its goals include streamlining procedures, eliminating paper-based processes, and facilitating real-time data exchange among institutions. However, businesses have reported that administrative complexities have merely transitioned into a new digital format rather than being alleviated.
Key challenges identified by companies include slow processing times, inconsistent application of regulations, and inadequate coordination among institutions. These bottlenecks lead to delays in documentation requests, company registration, and compliance processes, which are particularly disruptive for firms engaged in public procurement, exports, and labor-intensive industries.
A critical concern lies in the relationship between the IRMS and existing legal frameworks. Misalignment between the Law on Companies and other regulatory provisions creates ambiguity in implementation, compelling businesses to navigate overlapping or unclear requirements. This regulatory fragmentation introduces execution risks where compliance is feasible but operationally inefficient.
The Tax Administration has acknowledged these challenges, noting that digitalization efforts are advancing with over 95% of business processes now available electronically. Tens of thousands of tax filings and requests have already been processed through the IRMS. Nevertheless, achieving full functionality relies on integrating all relevant public institutions, many of which remain disconnected from the platform.
The repercussions for businesses are significant. Delays in issuing certificates and accessing necessary documentation, along with procedural inconsistencies, adversely affect investment timelines, hiring processes, and participation in tenders. Rather than alleviating administrative burdens, the current phase of implementation is generating transitional friction that heightens operational risks.
The private sector’s response is not against digitalization itself but rather against the execution model currently in place. Companies are advocating for simplified procedures, clearer guidance, expedited request resolutions, and more predictable communication channels with governmental institutions. There is also a growing call for transitional measures such as extended deadlines or hybrid processing options to mitigate risks during this stabilization phase.
For policymakers, the rollout of the IRMS serves as a crucial test of regulatory coherence. Digital platforms can only yield efficiency improvements if they are supported by a well-aligned legal and institutional framework. Without such alignment, there is a risk that digitalization may exacerbate existing inefficiencies instead of resolving them.
This situation reflects a common trend in administrative reforms: technological advancements are outpacing the necessary regulatory and institutional frameworks that must underpin them.
