Excise duty revenue on mineral oils and their derivatives amounted to €179.2 million last year and accounted for seven per cent of total budget revenue in 2023. Revenue from excise duties on tobacco and tobacco products amounted to €100.2 million last year, representing 3.9% of total revenue, while revenues from excise duties on alcohol and alcoholic beverages amounted to €21.2 million, or 0.8% of total revenues.
According Suzana Radulović, Secretary General of the Montenegrin Employers Federation, increasing excise duties (or any other form of tax) is not a solution that the economy views favourably, because it always has a (more or less) negative impact on the economy as a whole.
“Specifically, increasing excise duties inevitably leads to price hikes, which means – at least initially – falling demand for some products (sugar products, cocoa, ice cream, carbonated drinks with added sugar, non-carbonated water with added sugar etc.), while tobacco products slip from legal traffic to the grey zone,” said Radulović.
While excise duties are indeed a significant source of budget revenue, businesses see continuous changes to them as hindering their long-term planning
She added that excise duty revenues are specific in that they are collected on the sale of products that are mostly monopolistic in nature, i.e., they have no competitors on the market, and characterised by high demand and consumption.
“Despite not being the most generous form of tax, due to the direct connection with household consumption rates and the aforementioned characteristics, excise duties represent one of the more secure and predictable sources of budget revenue, and as such play a significant role in fiscal policy,” explained Radulović.
She warned that every increase in existing tax rates, excise duties and other fiscal and parafiscal levies, or the introduction of new financial burdens, hinder the planning of business expenses and the conducting of business activities.
