The Tax Administration (TA) has processed 849 requests for the elimination of interest on tax debts, in line with the Law on the Write-off of Interest on Overdue Tax Liabilities, which has been operational since January 3 of this year.

As reported to “Vijesti” by the Police Inspectorate, the total amount of interest eligible for write-off is 4.23 million euros, while 9.1 million euros in debt has been settled based on these requests.

Taxpayers have the right to submit applications for interest write-off until March 2, 2025, and the Tax Administration must decide on each request within 30 days.

This relief measure covers all overdue tax obligations (including taxes, fees, contributions, and other financial charges…) that must be paid by the end of December 2024. The law was initiated by the Ministry of Finance, led by Minister Novica Vuković.

The Police Department indicated that the data on submitted applications pertains to the timeframe from January 3 to February 14.

“As per Article 114 of the Law on Administrative Procedure, the Tax Administration has a 30-day period from the receipt of the request to reach a decision on whether to accept or deny it. This is contingent on whether the taxpayer meets the conditions outlined in the Law on the Write-off of Interest on Due Tax Liabilities. Taxpayers can submit a request for interest cancellation according to Article 4, paragraph 2 of the Law to the appropriate tax authority based on their registered location within 60 days following the implementation of this law, which concludes on March 2, 2025,” stated the Tax Administration.

At the end of 2024, the overall tax debt in Montenegro reached 664.9 million euros, reflecting an increase compared to the 591.7 million euros reported at the end of 2023, as per the Tax Administration.

“Of this amount, the principal debt is 402,986,284.13 euros, while the interest comprises 261,957,236.99 euros. For 2023, the principal debt was 363,394,478.08 euros, with interest totaling 228,302,771.99 euros,” noted the Public Prosecutor’s Office, led by acting director Sava Laketic.

When comparing the interest amount from the received write-off requests against the total tax debt at the close of 2024, which stands at 664.9 million euros—with interest alone at 261.9 million euros—it is apparent that taxpayer interest in this relief measure is comparatively low, as the requests submitted so far cover only 1.6% of the overall interest debt.

In response to inquiries about the effectiveness of this law based on the number of write-off requests received, the Tax Administration indicated that an evaluation cannot be made until the request submission deadline expires.

“The aim of the Law on the Write-Off of Interest on Overdue Tax Liabilities is to decrease overall debt and enhance liquidity to ensure long-term financial stability. This law allows taxpayers to have their interest waived provided they fully repay the principal debt. While we are pleased with the implementation progress of this law, a proper assessment of its impact cannot be made until the deadline for applications lapses,” said the Tax Administration.

“Vijesti” inquired about the total sum collected from tax debts last year and how this compares to 2023. However, instead of providing an answer, the Tax Administration submitted data regarding overall gross revenue collection for 2024.

“From January 1 to December 31, 2024, the Tax Administration achieved a gross tax revenue collection of EUR 1.607 billion, which is EUR 189 million (or 13%) more than the same period last year. The revenue collected exceeded the target by EUR 85 million (or 5.6%),” the Tax Administration stated.

At the end of the previous year, the Tax Administration informed “Vijesti” that despite the implementation of the Law on Interest Write-Off, they have continued with compulsory collection of tax debts.

“Given that it is uncertain which taxpayers will pursue the interest write-off and submit their requests—conditional on submitting all outstanding tax returns due by December 31, 2024, and paying the principal debt owed by that date—the Tax Administration has consistently enforced collection measures per the Tax Administration Law. The Interest Write-Off Law does not impede the enforcement of the Tax Administration Law for those taxpayers who fail to comply with legal requirements or meet tax obligations within the stipulated deadlines until the law takes effect,” the Tax Administration explained.

They further stated that taxpayers who submit requests and do not remit the principal debt will face compulsory collection measures in accordance with the provisions of the Law on Interest Write-off.

Governments led by the Democratic Party of Socialists (DPS) have previously proposed two legal frameworks aimed at writing off interest on tax debts.

The largest debts are attributed to personal income taxes and contributions.

Within the overall tax debt, the most significant portion arises from taxes and contributions related to personal income, totaling 372,377,932.02 euros.

“Of this total, the principal debt is 225,541,444.24 euros, while the interest amounts to 146,836,487.78 euros,” reported the Police Department.

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