The Government of Montenegro has announced new measures to support the economy for the second quarter of 2021, due to the crisis caused by the Covid-19 pandemic.
As announced with the implementation of support measures, since the first quarter of 2021, the government worked on the adoption of a new package of measures to support the Montenegrin economy and the citizens.
The package for the second quarter is aimed at special support for the liquidity of the economy ,as well as keeping the employment levels to meet the tourist season. The most important segment of this support package is a credit support to the economy, which will be implemented in several phases, with the aim of providing the economy with about 110 million euros of new credit funds.
The estimated value of the new support package is € 166,075,000.
With this new package the government has proposed and adopted a number of measures to support the economy, consisting of:
- A credit package – at least €110 million would be provided in loans to boost the economy of Montenegro intended primarily for micro, small and medium enterprises which would be realized in 4 phases by the end of 2021
- Wage subsidy program – with innovative methodology. The salaries of employees will be subsidized depending on the percentage drop in income in 2020 compared to 2019.
Earnings will be subsidized to the companies as follows:
- drop in income of 50% -70% would be subsidised with 50% of the minimum wage in Montenegro with taxes and contributions per employee
- drop in income of 70,1%-90% would be subsidised with 75% of the minimum wage in Montenegro per employee
- drop in income of 90,1%-100% would be subsidised with 100% of the minimum wage in Montenegro per employee.
The aim of this measure is to maintain the level of employment and at the same time to support employers in maintaining the level of liquidity.
- The new measures also envisage that the limit of the customs guarantee for deferred payment of customs debt ,will be extended from 30 days to 60 days, which delays the collection of customs debt (customs and VAT), due for collection in April, May and June 2021, which will help customs debtors to overcome difficulties in business and liquidity.
The implementation of the following measures from the first quarter continues to the second quarter:
- Reducing the rent of state-owned space and postponing the obligations
- Shortening the deadline for VAT refunds – amendments to the Law are expected to be adopted in May.
- Support for new employment – the adoption of amendments to the Law is expected during May.
- Increase of the turnover limit from EUR 18,000 to EUR 30,000 as a condition for mandatory VAT registration – amendments to the Law are expected to be adopted in May.
- Reduction of the annual fee for the use of marine property.
- Tourist vouchers for educators and health workers and support to owners of private accommodation.
- Program of interventions on the market of agricultural products, fishery and aquaculture products.
- Support for the purchase of domestic products.
For further information, please contact Fahrudin Sutkovic, country manager of Montenegro, at our Eurofast office in Montenegro at email@example.com .
Eurofast is a regional business advisory organisation employing local advisors in over 23 cities in South East Europe & Middle East (SEEME). The Organisation is uniquely positioned as one stop shop for investors and companies looking for professional services in South East Europe & the Middle East.