Montenegro’s Tax Administration collected €1.04 billion in gross tax revenue during the first seven months of 2026, an increase of €83.1 million, or 9%, compared with the same period last year. The figures cover collections between January 1 and July 31, 2026 and refer only to revenues administered by the Tax Administration. They do not include customs-administered taxes, excise duties, fees, non-tax income and other budget revenues collected outside the institution’s portfolio.
Collections accelerated in July 2026, when the Tax Administration recorded €154.3 million in revenue, up €28.7 million, or 23%, compared with July 2025. The monthly increase coincided with the start of the peak tourism season, stronger coastal consumption and intensified inspections targeting hospitality, accommodation providers and other cash-intensive businesses.
Social Contributions Drive Revenue Growth
Social-security contributions recorded the strongest increase among the disclosed revenue categories, reaching €262.1 million in the first seven months of 2026. This represented growth of €32.5 million, or 14.2%, compared with the same period a year earlier. Contributions accounted for almost 39% of the total €83.1 million increase in gross tax revenue. The increase was supported by higher declared wages, formal employment growth, improved worker registration and stronger enforcement activity.
Montenegro’s average net salary reached approximately €1,012, while registered unemployment declined to 7.84% in May 2026, the lowest level recorded since the country restored independence. The stronger contribution base follows changes in the tax and labour-market framework affecting the financing of pensions, healthcare and public services.
Corporate Tax Revenue Rises 3.6%
Corporate income tax collections reached €224 million during the first seven months of 2026, an increase of €7.7 million, or 3.6%, year on year.
Corporate tax revenue remains influenced by filing deadlines, advance payments and tax reconciliation procedures. Montenegro extended the deadline for submitting 2025 corporate income-tax returns until April 24, 2026, while companies adjusted to the new Integrated Revenue Management System. The corporate tax result reflects continued resilience in the business tax base despite slower economic expansion.
Montenegro’s real GDP increased by 2.7% in 2025, while the government expects growth of approximately 3.1% in 2026. Fixed investment grew by 11% in 2025, supported by tourism, real estate, energy and infrastructure projects.
Domestic VAT Growth Remains Moderate
Domestic VAT collected by the Tax Administration totalled €304.6 million, rising by €9.8 million, or 3.3%, compared with the previous year. The published figure covers VAT collected by the Tax Administration and does not include import VAT collected by the Customs Administration. Due to Montenegro’s import-dependent economy, customs VAT represents a significant component of total consumption-tax revenues.
The increase in domestic VAT reflects higher nominal consumption, although part of the growth is linked to inflation. Consumer-price growth is expected to average around 3.3% in 2026, limiting the real expansion of the VAT base.
Tourism Season Supports July Collections
The structure of revenue growth reflects the importance of Montenegro’s seasonal economy, with the period from June to September generating a significant share of annual activity in accommodation, restaurants, retail, transport and related services. Higher tourism activity supports VAT and payroll-related revenues, but also increases risks linked to undeclared employment, unregistered accommodation and non-fiscalised cash transactions.
The Tax Administration carried out more than 2,000 inspections during the early part of the 2026 tourism season and imposed fines approaching €1.8 million. Earlier enforcement actions resulted in temporary closures of businesses where significant irregularities were identified.
Digital Systems Become Part of Tax Modernisation
Montenegro is continuing the digital transformation of its tax administration through the use of electronic fiscalisation and the implementation of the Integrated Revenue Management System. The country has also launched an international procurement process for a national VAT Information Exchange System, which will connect the Tax Administration with European Union tax systems from the date of accession. The new digital infrastructure is intended to improve taxpayer registration, risk assessment, automated reconciliation and the matching of invoices, payments and declared turnover.
Revenue Growth Supports Fiscal Framework
The improved tax collection results contribute to Montenegro’s medium-term fiscal projections. The government expects total public revenue to reach €3.58 billion, or 41.6% of GDP, in 2026, increasing to approximately €3.99 billion, or 42.4% of GDP, by 2029.
The projected budget deficit stands at around 3.7% of GDP in 2026, declining to 3.2% by 2029. The authorities expect a current budget surplus of €110.1 million, or 1.3% of GDP, in 2026, while linking the overall deficit mainly to capital and development spending.
Public Debt Expected to Rise Temporarily
Montenegro expects public debt to increase temporarily to around 68% of GDP in 2026. The increase is partly connected with pre-financing obligations falling due in 2027, including a €750 million Eurobond maturity, as well as building a liquidity reserve ahead of repayment. The government projects that the debt ratio will decline from 2027 and reach approximately 59.9% of GDP by the end of 2029.
The fiscal trajectory depends on continued economic growth, controlled current spending, stronger tax collection and stable financing conditions. The seven-month revenue performance provides additional support for the fiscal outlook, with social-security contributions increasing 14.2%, while domestic VAT rose 3.3% and corporate income tax increased 3.6%.
