Montenegro to raise VAT to 19 percent

Montenegrin Deputy Prime Minister Vujica Lazovic has announced an increase in the value added tax from current 17 to 19 percent as well as new government borrowings for the purpose of preserving financial stability in the country.

Lazovic said in an interview with Podgorica's TV Vijesti that he was in favor of shutting down the Podgorica Aluminum Plant, assessing that that we could expect that factory "to produce only greater damage in the future." He added that the financial situation in the country was "serious, but not dramatic."

Lazovic announced that it was necessary to borrow EUR 50 million from the World Bank to preserve financial stability, adding that a condition for that loan was a VAT increase to 19 percent.

He also noted that VAT should be raised before the summer tourist season "in order to make the effects bigger," and it is assessed that the state would get EUR 40 million a year in that way.