Montenegro: Government prepares third bundle of economic measures

Montenegro: Government prepares third bundle of economic measures

The € 67.85 million-worth third package of Government economic measures to address the financial consequences of the coronavirus pandemic will be directed solely in the field of tourism, including only provisional measures to remain until 2022, said Montenegrin Prime Minister Duško Marković today in Parliament, during the Prime Minister’s Questions.

“It includes subsidising the interest rate for loan rescheduling with Investment and Development Fund and commercial banks worth € 12 million, applying a reduced VAT rate of 7% for a period of one year (i.e. until the middle of next year) totaling € 16 million, a credit line with the Investment and Development Fund for liquidity and working capital with a subsidised interest rate, € 3 million-worth subsidies for private accommodation rentals, as well as subsidies for tour operators and funds for promotion”, PM Duško Marković announced, to a question from the MP Group of the Democratic Party of Socialists.

He said the bundle of long-term proposed measures that will be applied until 2024, and which the Government will present tomorrow, will amount to a total of € 131.7 million.

Montenegro’s Prime Minister added that the Government had demonstrated its support from the beginning, “so we should not speak in terms of expectations or assumptions, because the institutions have been doing their job for months”.

“The process of adopting the third set of measures was somewhat longer than we planned, but I believe that it is clear to everyone in Montenegro that we had to examine the situation comprehensively, in order for the measures to be adequate. When we entered that process, right after the second bundle of measures, the situation was different. We did not have active cases of infection, and the situation in the region and in other outbound markets was improving. Unfortunately, we witnessed a negative turn of events during June. Therefore, as I said, through the third set of measures the Government will allocate almost € 200 million for tourism through short-term and long-term measures, and thus demonstrate once again the will to fully address the challenges in the tourism industry, but also in all other sectors, in order to return the Montenegrin economy to the path of development, as it was paved before this crisis”, said Marković.

He reminded of the previous two sets of Government measures to support the economy and citizens, saying that since April, in order to support the payment of salaries of employees in the tourism and catering sector, approximately € 12.14 million have been disbursed for a total of 40,422 salaries, adding that the Government will cover the June wages as well.

Marković listed the hitherto interventions, and presented the planned measures:

– Facilitation of exempting startups from taxes for up to 5 years

– Facilitating employment in innovation activity – significant reduction of taxes and contributions paid by the employer, up to 50%

– Exemption of innovative projects from taxes and contributions paid by the employer

– 100% income tax exemption for reinvestment in innovative projects

– 100% income tax exemption for investment in startups and funds to finance innovative projects

– Exemption of donations to scientific and research institutions from income tax

– Reduction of property taxes and construction of infrastructure for innovation and, of course,

-the establishment of the Innovation Fund.

“In conclusion, I will just say that, in partnership with the University, we have launched the construction of a technology park in Podgorica worth over 8 million euros, which will be a central space that will bring together young researchers, innovators, their connectivity, development of various projects and of course create or expand export orientation. We expect results in this sector in the short term”, Prime Minister Duško Marković concluded. /ibna