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The increase in revenue from value-added tax (VAT) last year is primarily a result of high price growth, although the growth in imports also contributes to the increase in revenue due to its impact on the growth of domestic market transactions, stated Dr. Milika Mirković, a researcher at the Institute for Strategic Studies and Projections (ISSP), in a statement to Pobjeda.


During the previous year, he emphasized, the average inflation rate was 13%, reaching over 17% by the end of the year.

- High prices have affected the value of transactions, leading to higher VAT revenues - said Mirković, highlighting that the increase in prices also influenced the growth of the value of imported goods and services, resulting in a higher value of foreign trade.

- It should also be noted that during the previous year, there was a real (not just nominal) increase in imports, but at the same time, there was also a real increase in exports. So, the increase in imports should not be seen as something negative because it often generates exports and increased revenue through various tax bases - Mirković said.

According to him, the level of prices in the coming period will largely determine the nominal amount of VAT revenue. - Therefore, it may happen that there is a decrease in imports, while VAT revenues increase due to potentially high inflation - Mirković stated.


Budget execution data for last year showed that VAT revenues recorded a record growth compared to 2021, amounting to 216.1 million euros or 31.2%. The Ministry of Finance previously announced that VAT revenues were the main driver of overall revenue growth last year. The budget execution report for January states that, compared to the planned figures, revenues were higher by 14.7 million euros or 9.6%, while compared to the same period last year, they were higher by 59.9 million or 55.6%. The Ministry explained that the revenue growth in the observed period was the result of an increase in VAT inflows, which amounted to 79.8 million euros, higher by 29.5 million or 58.8% compared to January of the previous year. Compared to the planned level, VAT revenues were higher by 14.8 million euros or 22.8%, continuing the trends from the previous year.

Montenegro's total foreign trade turnover last year, according to preliminary data from Monstat, amounted to 4.24 billion euros, which is 44.1% higher than in 2021. Exported goods were worth 700.2 million euros, an increase of 60.2% compared to the same period. Imports were higher by 41.3%, totaling 3.54 billion euros. The trade balance coverage was 19.8%, higher than the same period in 2021 when it was 17.4%.

Montenegro's total foreign trade turnover in January, according to preliminary data from Monstat, amounted to 299.9 million euros, 42.9% higher than the same month last year. Exports increased by 35% to 87 million euros, while imports increased by 46% to 213 million. However, the trade balance coverage fell by four percentage points to 40.9%.


- The growth in imports certainly contributes to the increase in VAT revenue due to its impact on the growth of transactions in the domestic market. However, imports should be viewed in the context of the economic structure. Domestic production creates multiplier effects that also manifest in higher consumption - said Mirković, emphasizing that comparative advantages and production costs should be taken into account.

- Therefore, sometimes, in the case of high production costs, it is more beneficial for the economy to import goods for which there is no comparative advantage. On the other hand, if we look at the Montenegrin economy, the growth in the number of tourists contributes to increased demand in the market, which conditions an increased import of goods. If the turnover decreases, a decrease in VAT revenue is expected - Mirković stated.

In our exports, electricity, energy, and aluminum dominate, with Electroprivreda and Uniprom traditionally being the largest exporters. On the other hand, we still spend the most on importing food, oil, cars, and electricity!

Last year, the export of electric energy increased by 165.3% compared to 2021, reaching 170 million euros, primarily due to the shutdown of electrolysis. The export of higher-grade processed aluminum was worth 171.3 million euros, an increase of 109.4% compared to 2021. The export of bauxite fell by 19% to 41.7 million euros. The export of food increased by 30%, reaching a modest 43 million euros, with meat contributing 26 million euros and fruits and vegetables contributing 10.8 million euros.

In the structure of imports, machines and transport devices dominate with 709.7 million euros. Of this, 228 million euros, an increase of 54.6%, is related to road vehicles, and 142 million euros to appliances and devices, with 142.2 million euros for other items. The import of oil and its derivatives was worth 396.2 million euros, an increase of 102.8%, mainly due to the rise in fuel prices. The value of imported electric energy was 209.4 million, an increase of 197.5%.

The import of food was worth 636 million euros, 32.7% higher. Of this, 140.5 million was spent on meat, an increase of 38%, and 90 million euros on fruits and vegetables, a quarter more than in 2021. The value of imported cereals and flour increased by 35% to 97.5 million euros.

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