Director of Tax Administration, Mr Miomir M.Mugoša, presented encouraging data showing that tax collection in June was the same as in June last year, when economic growth was strong. In the interview for Dnevne novine, Mr Mugoša revealed suprising data that collection of corporate income tax was €1 million higher than in June 2019.
What was tax discipline like during the pandemic? Are you satisfied?
Mr Mugoša: Due to COVID-19 pandemic, businessmen in all activities are faced with numerous challenges which could seriously affect their survival. The situation in functioning of state institutions is also very unstable.
However, despite the difficulties, and the fact that huge number of taxpayers were not allowed to work, tax discipline hasn’t been on downward trend over the past few months.
Since the beginning of March, we have received almost 27.000 applications for annual corporate income tax, the same amount of financial statements and 96.000 IOPPD forms.
In addition, tax inspectors monitored the work of taxpayers and hasn’t found any irregularities in the procedure of inspection surveillance.
How do you explain the fact that total collection in the first five months was better than in 2018?
Mr Mugoša: After the record €282 million in the first quarter of 2020, economic crisis has hit the economy and affected primarily collection of taxes on personal income. That resulted in fall in revenues (€14 million).
However, even in such circumstances, the result was considerably above the one achieved in previous years.
In public it is interpreted as a sign of recovery.
Mr Mugoša: We see such results as indicator of the continuity in the growth of Montenegro’s economy and extension of tax base as well as an indicator of the growth of fiscal culture of Montenegrin businessmen.
What are June indicators like?
Mr Mugoša: Observing the current cross-section of the June collection, I can state that stabilization of the epidemic and resumption of work of business entities resulted in slight recovery of tax collection. Since the beginning of June, a total of €71,5 million gross collection has been recorded.
Taxes on salaries of the employees is a very important segment due to its share in public revenues.
Do you have any data on the reduction of the number of employed people?
Mr Mugoša: With the beginning of tourist season, there will be new employment and redistribution of workforce in the activities which are part of tourism offer. Therefore, employment won’t fall.
Having regard to Government’s support, I can say that we expect the forthcoming months with slight optimism.
The big fiscalization project has been initiated, the law has been adopted, rulebooks have been published. What additional revenues do you expect from this big reform project?
Mr Mugoša: Implementation of the fiscalization project is underway and it encompasses several aspects: establishment of normative framework , technical conditions, information and preparation of taxpayers regarding the new way of communication with Tax Administration and delivery of data on the turnover automatically and in real time.
At the moment, legislative framework and three rule books are completed.
Procurement of software and hardware solution for the implementation of fiscal service will be carried out through tender procedure.
We have big expectations. The project will modernize the way of communication between state administration and economy, in accordance with the technological development and automation trends in business processes.
Is finally stealing from the country practice over?
Mr Mugoša: Electronic fiscalization project will bring many benefits, both to state budget and regular business and labor market.
Tax Administration has been recognized as exceptional institution of public administration. What is average salary in Tax Administration and do you need more employees, tax inspectors to be more precise?
Mr MUGOŠA: Average monthly salary in the Administration amounts to €531, while tax inspectors earn between €590 and €750 per month, depending on the past service and title (I, II or III).
We are aware that these amounts are not proportionate to the level of responsibility, volume of work and expectations the state has, and that’s why we are endeavoring to motivate our employees.
We are also continuously working on reinforcing the staff.
