The government’s announcement that it is considering reducing taxes and contributions to the salaries of employees in 2018 is a positive impetus for employers and investors, says the economic analyst Predrag Drecun. However, he says he isn’t sure whether the executive power will succeed in doing it so soon.
In an interview with Dnevne Novine, Drecun explains that smaller taxes and contributions to wages would bring order to the employer-worker relations. Employers have been warning for some time that the taxes and contributions are too high.
“In that way employment will certainly grow. It is hard to predict the rate of employment increase but this can be a stimulating and desirable measure,” Drecun said.
Regarding VAT, which will increase to 21% as of 1 January (instead of the current 19%), Drecun expects that its further growth can be expected in the coming period. He added that the tax system in Montenegro was much more stimulating compared to the countries in the region.
“It is hard to expect a reduction, because VAT in many countries is higher than it will be in Montenegro as of the beginning of 2018,” he said.
