Citizens of Montenegro Prepare for the Fourth Stimulus Package

January 28, 2021

Citizens of Montenegro Prepare for the Fourth Stimulus Package

January 28, 2021

Radovan Grbović

Radovan Grbović

Partner

Dragan Martin

Dragan Martin

Junior Associate

The Agency for Protection of Competition of Montenegro approved on 25 January the new stimulus package by the Government of Montenegro. This stimulus package comes as a fourth aid package and a much-needed relief in combating the negative effects of an economic downturn caused by the COVID-19 pandemic.

The stimulus package is comprised of four segments:

 

1) First segment

The first segment will provide support to vulnerable categories of the population up to the amount of EUR 7 million, in the first quarter of 2021. This segment refers to a one-time assistance of EUR 100 for persons that were registered in the unemployment register of the Employment Service of Montenegro at the end of last year.

The users of material security should receive a one-time financial compensation in the amount of EUR 50 per family with one or two members, and EUR 100 per family with three or more members.

All pension users who receive pensions in Montenegro in the amount less than the minimum wage (EUR 222) will receive EUR 50 in one-time financial assistance, and the same amount will be given to the beneficiaries of the right to personal disability benefits through the Centers for Social Work.

 

2) Second segment

The second segment of the aid package refers to supporting the economy, through subsidizing salaries, postponing and rescheduling the payment of taxes and income contributions, reducing the price of renting state-owned space and postponing related obligations, and shortening the VAT refund period.

New measures are also being introduced, such as support for new job creation, one-time support to the economy for the establishment of an electronic fiscalization system and an increase in the turnover limit from EUR 18,000 to EUR 30,000 as a condition for mandatory VAT registration. EUR 22 million is designated for subsidizing salaries in the first quarter.

 

3) Third segment 

The third segment includes additional support measures for tourism and catering – reduction of the annual fee for the use of marine property in the amount of EUR 3.5 million, subsidization of tour operators in the first quarter of EUR 150,000 and introduction of tourist vouchers for educators and health workers, as well as support to private accommodation industry in the amount of EUR 5.5 million in the first quarter.

All health and education workers will be awarded tourist vouchers worth up to EUR 200, which they can use through domestic travel agencies until 1 June 2021.

Tourist vouchers are valid only for registered private accommodation, and their use is one-time. The owner of the private accommodation will be paid on the basis of a tourist voucher 10 days after the realization of the arrangement. Global travel platforms like Booking.com and AirBnB cannot be used as mediators.

 

4) Fourth segment

Lastly, the fourth segment determines additional support measures for agriculture and fisheries. This includes a program of interventions in the market of agricultural and fishery and aquaculture products, in the amount of EUR 1,724 million annually. The government also plans to support the purchase of domestic products, but it is not stated in what amount.

While the Government has yet to enact this stimulus package, there is no doubt that certain vulnerable groups will see an added benefit to their lives and businesses, which were both negatively impacted by the pandemic.

 

 

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

Contact:

Milan Samardžić, Partner
milan.samardzic@sog.rs

Dragan Martin, Junior Associate
dragan.martin@sog.rs

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