Kolasin, (MINA-BUSINESS) – According to a study conducted by the Centre for Economic and European Studies (CEES), higher levies and complex administrative procedures are slowing economic growth in northern Montenegro.

 

The business environment survey, presented at a workshop in Kolasin, found that the system of parafiscal charges in northern Montenegro is characterized by a large number of fees and their continuous increase.

 

“As many as 61.7 percent of companies reported that levies have increased over the past three years, while 86.6 percent believe that these charges have directly or indirectly affected their investment plans,” CEES said in a press release.

 

At the same time, 60 percent of business owners believe that the heavy burden of fiscal and parafiscal charges (taxes, fees, and membership contributions) encourages activity in the informal economy. Meanwhile, 65 percent said that high fiscal and parafiscal burdens over the past year have limited their ability to hire new employees.

 

The survey was conducted in April on a sample of 100 companies from 13 municipalities in Montenegro’s northern region. 

 

CEES Project Coordinator Nina Vujosevic said that improving the business environment is one of the key prerequisites for reversing negative demographic trends and accelerating the economic development of northern Montenegro.

 

“Micro and small enterprises account for almost 99 percent of the economy in the northern region. Their development directly contributes to the creation of new jobs, retaining the local population, and strengthening the fiscal capacity of local administrations. That is why it is important that decisions on introducing new levies or increasing existing ones are based on an assessment of their impact on business performance,” Vujosevic said.

 

She added that CEES’s analysis showed that increasing certain fees and charges does not necessarily lead to higher municipal budget revenues, highlighting the need for a systematic approach to reforming parafiscal charges at the local level.

 

State Secretary at the Ministry of Regional and Investment Development and Cooperation with Non-Governmental Organizations, Mirsada Bosnjak, presented the Ministry’s activities aimed at improving the competitiveness of northern Montenegro and its business environment.

 

“We are continuously working with local governments to improve business conditions and attract investment. Research shows that the business environment rating has improved to 3.05, and we will continue working to further enhance it,” Bosnjak said.

 

Presenting the survey findings, Slaven Zivkovic, Executive Director of DeFacto Consultancy, said that businesses identified rising parafiscal burdens, insufficient regulatory predictability, and complex administrative procedures as their biggest challenges.

 

“As many as 61.7 percent of respondents stated that local governments occasionally change fees without prior notice or consultation with the business community, while 80 percent believe that reducing and streamlining parafiscal charges would have a positive impact on their development over the next two to three years,” Zivkovic said.

 

Workshop participants agreed that a more predictable regulatory framework, more efficient administrative procedures, and stronger dialogue between businesses, local administrations, and public institutions are essential for creating a more favourable business environment and ensuring more sustainable economic development in northern Montenegro.

 

The workshop brought together representatives of the municipalities of Kolasin and Andrijevica, public institutions, the business community, and the non-governmental sector. 

 

It was organized as part of the project “Economic Development of Northern Municipalities: Achieving Greater Development through the Reform of Levies,” implemented with the support of the Ministry of Regional and Investment Development and Cooperation with Non-Governmental Organizations.