Podgorica, (MINA-BUSINESS) – Head of the URA parliamentary group Milos Konatar has said the parliamentary majority’s plan to raise the corporate income tax rate from 12 percent to 15 percent will destabilize the business climate, further harm the economy, and drive up prices, adding that the costs will ultimately be borne by citizens.

He warned that a flawed fiscal strategy, a €232 million deficit in the state pension and disability insurance fund (PIO), and a drop in economic growth from 4.8 percent to below 3 percent all contributed to the government’s misguided decision to increase VAT on tourism services.

“This has already led to price hikes and negatively impacted the tourism season, and now the same mistake is being repeated with the corporate income tax increase,” Konatar added.

He stated that the changes were being made without prior analysis, public debate, or consultations with the Chamber of Commerce and employer associations.

“Montenegro needs a stable business environment and a tax policy that attracts and incentivizes investment, not overnight tax hikes driven by poor economic policies that will only create deeper problems, all at the citizens’ expense,” Konatar concluded.