Konjevic announced budget revision

#RaškoKonjević #BudgetRevision #PublicDebt #TaxEvasion

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The state of public finances is very difficult, says Finance Minister Rasko Konjevic, adding that the budget revision is inevitable.

The state of public finances is extremely difficult, the Ministers of Finance in the government of electoral trust from the opposition, Rasko Konjevic, stated. Konjevic said that the tax debt was €230m on 25 May and that that amount was not collectible, according to the Tax Administration.

He said that 29 taxpayers have above €1m tax debt, whereas 32 of them owe €500,000–€1m.

“This means that the total tax debt of those who owe more than €500,000 amounts to €120m”, Konjevic said appearing on Atlas TV show Club A.

He also said what might have been done with the €120m if it had been collected from the greatest debtors, adding that the sum was slightly less than a quarter of the loan the state had taken out for the highway Bar-Boljare construction.

“This is about tax debts that taxpayers have reported but not paid and the state has been tolerating this for years”, Konjevic said. He added that a lot could have been done in the health care and education sectors, as well as in the security system, in the last three years had there been €60m more in the budget annually.

Konjevic added that he would obtain information from the Tax Administration on each debtor owing more than €1m by Thursday and about the measures taken against them. He said that the Montenegrin tax system was unfair and labelled it “a tax system in quotes”. He also remarked that there were a huge number of small and medium-sized enterprises which settle their obligations properly.

“The state is tolerating tax evasion of certain entities, whereas on the other hand there are those who regularly settle their legal obligations. Therefore, they do not have equal conditions in the market”, said Konjevic.

He pointed out that no tax instruments were used to collect the tax debt or they were used insufficiently.

“The power of the state in the public finance system is shown through tax collection”, the minister said.

He announced that the state budget would be revised, given the fact that the collectable tax debt amounted to €230m and that, among other things, there were €15m missing for the implementation of the Law on Salaries in the Public Sector.

“Due to inadequate fiscal assessment and having in mind the popular law on mothers, as it is publicly recognised, it is inevitable to have the budget revised”, Konjevic said.

Commenting on the method of securing the missing funds, Konjevic says that we should be worried because of the fact there had been no investors interested in the eurobonds issued in March, which are the safest government securities. We issued them on the international market in the amount of €480m – the missing sum in this year state budget. He called in mind that €300m out of €480m of the bonds issued were completed.

“We’ll see how the missing part of the funds will be compensated, whether through a new issue of Eurobonds or through bilateral arrangements with banks. Unfortunately, according to this year budget, €390m out of the planned €480m should be allocated for paying off the debts from the previous period”, the minister said.

He said that next week he would be informed whether the public debt exceeded 60% of GDP limit. In that case, as he said, the government was legally obliged to make the rehabilitation plan, involving a series of unpopular measures.

Source: Cafe Del Montenegro