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Montenegro’s Tax Evasion Problem: Citizens Lack Trust in System
A recent survey has revealed that a staggering 68% of respondents believe that punitive measures implemented by the Montenegrin government are ineffective in combating tax evasion. This lack of trust in the system is reflected in the fact that 77% of respondents would not report receiving a fiscal bill.
Causes of Tax Evasion
The problem of tax evasion in Montenegro can be attributed to several factors, including:
- Underdeveloped economic structures
- Lack of transparency in certain sectors, such as tourism and hospitality
- Lack of awareness among citizens about the importance of reporting suspected cases of tax evasion
Effects of Tax Evasion
Tax evasion has far-reaching consequences for both the state’s revenue and the overall economy. As local economists have warned, “Tax evasion is a major problem that affects not only the state’s revenue but also the overall economy.”
Recommendations to Combat Tax Evasion
To combat this issue, experts recommend:
- Conducting research on the extent of tax evasion in Montenegro through surveys of legal entities and entrepreneurs
- Simplifying tax procedures
- Introducing electronic filing of tax returns
- Increasing employee training within the Tax Administration
Government Efforts
The Montenegrin government has taken steps to address the issue, including:
- Implementing punitive measures
- Increasing public awareness campaigns
However, more needs to be done to restore citizens’ trust in the tax system and combat tax evasion effectively.
References
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Institut sertifikovanih računovođa Crne Gore, (2019). Propisi, Available at: https://www.isrcg.org/
International tax avoidance and evasion, Compendium of documents (1981). Amsterdam: International Bureau of Fiscal Documentation, 23.
Jovašević, D. (2006). Leksikon krivičnog prava, Beograd, Službeni glasnik 3. izdanje, 1-816.
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Official Gazette of Montenegro, 2011. Tax and contribution evasion No. 70/2003, 13/2004, 47/2006, No. 40/2008, 25/2010, 32/2011, 64/2011.
Official Gazette of Montenegro, 2019. The criminal procedure code no. 57/09, 49/10 and 35/15