In 2024, the total tax debt in Montenegro increased by 60 million euros compared to 2023, reaching 655 million euros. Of this amount, 398 million euros is the net principal debt, while 257 million euros represents interest. This growth in tax debt is largely attributed to the accumulation of interest, which accrues at a daily rate of 0.03%. In 2023, the total tax debt was 595 million euros, with 369 million euros in principal debt and 225 million euros in interest.
The Tax Administration has been actively addressing the issue of tax discipline, as a significant number of businesses continue to operate in the informal economy. In response, the administration has enhanced its inspection efforts, improved digitalization of processes, and worked on encouraging better tax compliance to bring businesses into the formal economy. In the first 11 months of 2024, the Tax Administration collected 1.46 billion euros in gross revenue, exceeding the planned target by 110 million euros (8%) and surpassing the previous year’s revenue by 206 million euros (16%).
In terms of specific tax categories, revenue from VAT in 2024 reached 440 million euros, an increase of 73.5 million euros compared to the same period in 2023, and 12.8 million euros above the planned target for the year. Corporate income tax collections amounted to 207.7 million euros, an increase of 59.5 million euros over the previous year, and 30% higher than the 2024 target. Additionally, social security contributions totaled 533.5 million euros, 36.8 million euros more than in 2023, and 13.8 million euros higher than the planned figure for the year.
Despite efforts to improve tax compliance, the issue of tax debt persists, with the largest tax debtors being both private and state-owned companies. Among the top debtors, Spic Roghe International (Montenegro) Limited DOO Podgorica owes 12 million euros, China Road and Bridge Corporation DOO, a foreign company in Podgorica, owes 11.7 million euros, and Balcke-Durr Energy Solutions s.p.a. Genoa, another foreign company in Podgorica, owes 7 million euros. Among state-owned companies, the largest debtors include Plantaže with 14.6 million euros, Željeznički Prevoz Crne Gore AD Podgorica with 6.6 million euros, and Željeznička Infrastruktura Crne Gore AD Podgorica with 5.4 million euros.
The Tax Administration has also been dealing with state-owned companies that have entered into repayment agreements but have not fully honored them. In such cases, the Tax Administration enforces penalties, including the cancellation of repayment agreements and the initiation of forced collection procedures.
To address long-standing tax obligations, the government has adopted a law on the cancellation of interest on overdue tax debts. This law allows for the cancellation of interest for taxpayers who have filed all required tax returns by December 31, 2024, and who fully settle their principal tax debt within 60 days of the law’s implementation.
The overall tax discipline in Montenegro remains a challenge, mainly due to the ongoing presence of informal business activities. However, the Tax Administration continues to implement measures such as increased inspections, better digital systems, and efforts to raise awareness about the importance of paying taxes in order to integrate the gray economy into the formal sector.
