Page 124 - SE Outlook Regions 2022

At the same time, the lower income from taxes on wages would be
compensated by an increase of the excise duties on tobacco, soft
drinks, alcoholic beverages, sugar, cocoa and ice cream. This should
bring a total of €22.5mn to the budget income per year.

The profit taxes will also be amended and will depend on the profit. If it
is up to €100,000, the tax would be 9%, then it would rise to €9,000
plus 12% on the profit above €100,000 and go further up to €177,000
plus 15% on the profit above €1.5mn. The government expects that this
would bring an additional €28mn to the budget per year.

Montenegro’s government debt is expected to fall for the first time since
the country declared independence, dropping to 87.37% of GDP in
2021, according to the finance ministry. The debt reached 103% of
GDP in 2020 due to the increased costs related to the coronavirus
(COVID-19) pandemic and its economic consequences but started
falling in 2021 thanks to repayment of debt from the eurobond issued in
2016.

According to Montenegro’s macroeconomic and fiscal policy plan the
debt should fall to 71.7% of GDP in 2023. The public debt stood at
€4.08bn at the end of June, equalling 87.98% of the projected full-year
GDP forecast, finance ministry data showed.

Montenegro’s foreign debt was €3.65bn, slightly up from €3.64bn at
end-March, but lower compared to €3.83 at end-December. China’s
Exim Bank, which lent the country most of the funds needed for the
Smokovac-Matesevo highway, remained the largest creditor at the end
of June with the debt totalling €688.09mn. Montenegro asked the EU
for help to repay the debt, but managed to make its first repayment
without external help.

The debt to the International Bank for Reconstruction and Development
(IBRD) totalled €185.06mn. The debt to the European Investment Bank
stood at €105.73mn.

4.8 Budget and debt - North Macedonia

North Macedonia’s government set the 2022 budget deficit at 4.3% of
the country’s GDP, which is 2.2 percentage points lower than last year's
budget gap. The budget will be development oriented.

Budget revenues for 2022 are planned at MKD238.9bn (€3.9bn), which
is 7.4% more than a year earlier, while total costs would be 1.4% higher
y/y at MKD272.4bn, making a deficit of €33.5bn.

124 SE Outlook 2022 www.intellinews.com