Ministry of finance of Montenegro annual report II 2007 www.mi­ni­s­tar­s­tvo-fi­nans­i­ja.vlada.cg.yu TAX ADMINISTRATION: www.poreskauprava.vlada.cg.yu CUSTOMS administration: www.upravacarina.vlada.cg.yu DIRECTORATE for ANTI-CORRUPTION INITIATIVE: www.antikorup.vlada.cg.yu ADMINISTRATION fOR THE PREVENTION Of THE MONEY LAUNDERING: www.gom.cg.yu/aspn REAL ESTATES ADMINISTRATION: www.nekretnine.cg.yu PUBLIC PROCUREMENT DIRECTORATE: www.djn.vlada.cg.yu Annual r­epor­t of the Mi­ni­s­tr­y of Fi­nance of Montenegr­o / 2007 TABLE OF CONTENTS 6-7 EDITORIAL, - Ana Miljanić, Editor 8-15 TOTAL BUDGETARY RECEIPTS (OF CURRENT AND CAPITAL BUDGET) AND RECEIPTS OF STATE FUNDS - Nikola Vukićević MA, Assistant to the Minister 16-21 PLANNED PROJECTS IN THE CAPITAL BUDGET FOR 2008 - Ljiljana Crnčević, Coordinator of the Department for Public Investment Planning 22-24 BUDGET OF STATE FUNDS FOR 2008 - Nikola Vukićević MA, Assistant to the Minister 25-28 MEDIUM-TERM MACROECONOMIC AND FISCAL FRAMEWORK 2008 - 2010 - Stanko Jeknić PhD, Coordinator of Macroeconomic Analysis and International Cooperation Department, - Vladislav Karadžić, Independent Advisor, - Radovan Živković, Independent Advisor 29-31 DEVELOPMENT STRATEGY OF PUBLIC INTERNAL FINANCIAL CONTROL OF MONTENEGRO, - Mila Barjaktarović, Assistant to the Minister, - Ivana Vuletić, Authorised Officer I 32-37 MONTENEGRO: ECONOMIC AND FISCAL PROGRAMME FOR PERIOD 2007 – 2010 - Milorad Katnić MA, Assistant to the Minister, - Bojana Bošković, Senior Advisor Annual r­epor­t of the Mi­ni­s­tr­y of Fi­nance of Montenegr­o / 2007 38-39 MODERNISATION OF THE CUSTOMS SERVICE OF MONTENEGRO AS AN ANSWER TO MODERN CHALLENGES - Miodrag Radusinović, Director Ministry of Finance 40-46 FUNCTIONING AND RESULTS OF THE TAX of Montenegro ADMINISTRATION IN 2007 Annual Report of the Ministry of Finance - Mirjana Pešalj, Director 2007 47-51 ACTIVITIES OF THE REAL ESTATE NUMBER: 2 ADMINISTRATION IN 2007 - Mićo Orlandić, Director PUBLISHED: annualy 52 RESULTS OF ADMINISTRATION FOR THE PREVENTION OF PUBLISHER: Ministry of Finance MONEY LAUNDERING IN 2007 - Predrag Mitrović, Director FOR PUBLISHER: Igor Lukšić, PH.D. 53-54 REALISED ACTIVITIES OF THE DIRECTORATE FOR EDITOR-IN-CHIEF: ANTI-CORRUPTION INITIATIVE IN 2007 Ana Miljanić - Vesna Ratković, Director ASSISTANT EDITOR-IN-CHIEF: Biljana Bataković 55-57 WORK OF THE PUBLIC PROCUREMENT EDITORIAL BOARD: Koviljka Mihailović DIRECTORATE IN 2007 Milorad Katnić - Mersad Mujević, Director Krsto Racković TRANSLATOR: 58-67 ACTIVITIES OF THE MINISTER OF FINANCE Jelena Čađenović IN 2007, PR SERVICE DESIGN: - Ana Miljanić, Spokesperson, Adil Tuzović - Biljana Bataković, Assistant Spokesperson CONTACT: PR Office of the 68-71 LEGISLATIVE ACTIVITIES OF THE MINISTRY Ministry of Finance OF FINANCE IN 2007 TEL: - Ana Miljanić, Spokesperson +382 81 224 581 FAX: 72-74 STATE DEBT – ON 31. DECEMBER 2007 +382 81 224 450 - Nemanja Pavličić, Coordinator of the Department for E-MAIL: [email protected] Public Debt Management, Indebtedness Analysis, Cash Management and International Relations WEB: www.ministarstvo-finansija.vlada.cg.yu 75-82 CONSOLIDATED PUBLIC SPENDING IN 2007. GODINI ADRESS: Stanka Dragojevića br 2, Podgorica - Stanko Jeknić PhD, Coordinator of the Macroeconomic Analysis and International Cooperation Department, PRINT: DPC - Grafotisak - Vladislav Karadžić, Independent Advisor, - Radovan Živković, Independent Advisor COPYES: 400 - Iva Vuković, Senior Advisor Annual r­epor­t of the Mi­ni­s­tr­y of Fi­nance of Montenegr­o / 2007 Editorial Dear Readers, The logical sequence of achieved laws are certainly an important part of economic independence and eco- mentioned processes, primarily as the nomic self-sustainability of Montene- additional impetus to attractiveness of gro is the impetus of economic inte- Montenegro at the investment map. gration processes, equal participation Simultaneously with the very fast in simpler promotion of numerous process of enrolment of the country, resources of the country in 2007. results realised in different areas of After regaining of independence structural reforms and forming of the in June 2006, Montenegro has real- stable institutional business environ- ised more intensive communication ment, have led to improvement of with international partners and higher position of Montenegro at the global progress on political and economic market, and had a positive effect on plan. Beside the admission of Mon- state credit rating, which has been tenegro in OSCE, United Nations and improved this year from BB to BB+ in Partnership for Peace, it also became one of leading rating agencies Stand- the member of the most significant ard & Poor’s. international financial institutions Macroeconomic stability is present – European Bank for Reconstruction several years now, and favourable and Development EBRD, on 3rd June trends continue also in 2007. Stable 2006, International Monetary Fund leading of public finances, structural and World Bank, on 18th January 2007 changes in the sphere of price and and Development Bank of Council of trade liberalisation, privatisation and Europe on 19th November 2007, which numerous other reforms led to impe- certainly confirms that we are leading tus of the economic growth. the stable economic policy. Combination of growth of person- In October 2007, the new Consti- al spending and investments caused tution has been adopted, and in the the higher demand this year in econ- same month Stabilisation and Asso- omy, which had as a result growth of ciation Agreement with EU, which public revenues. Montenegrin public represents the significant formal step finances in last two years have record- toward accession of the country into ed surplus of more than 3% of GDP, EU. Beginning of application of CEFTA which is one of main guidelines of fis- and adoption of systematic property cal policy, and part of that surplus was Annual r­epor­t of the Mi­ni­s­tr­y of Fi­nance of Montenegr­o / 2007 used for premature debt repayment tax policy- creation of favourable busi- to World Bank, first in September, to ness environment, with harmonisation the amount of 19 millions, and later of our tax legislation with internation- in December, to the amount of 40 mil- al standards and directives of EU. lions EUR. Continuity of informing of public Opening of the restitution process on important economic parameters, in 2004, will influence next year at the as one of standards which is obeyed public debt level, although the recent by developed countries, has also been amendments to the relative Law limit provided. Beside the Agenda for 2007, this component of debt to the maxi- and additional regulations of capital mum of 10% of GDP for the period of strategies, in last couple of years have application of the Law, but at the same been realised and numerous projects time, the foreign public debt is being were published, which contributed to reduced due to the mentioned prema- the information of public on overall ture repurchase. activities of the Ministry of Finance and specific segments of work. Ten We continued the reforms of numbers of the Bulletin of Ministry the budget system in 2007. After the of Finance have already been pub- introduction of the Capital budget, lished, which contain quarterly over- extension of the Programme budg- views of general economic and fiscal et and implementation, for 2007 was trends, news and main characteristics also characteristic adoption of Law of the process of economic reforms in Amending and Supplementing the the country, than Tax Guide, Annual Budget Law, which defines the new Report I, and website of the Ministry institutional position of state funds of Finance is daily reliable source of and regulates, among others, adoption information, both on actual news and of the Budget, records, management, current programmes and the overall preparation and planning, realisation legal regulations. etc. Furthermore, the Law covers the matter which treats public debt, and Second number of the Annu- current Law on Borrowing and Debt al Report is the overview of most Management of the Public Sector is important activities of the Ministry of put out of force. Finance within all above mentioned Low on Budget for 2008 has also segments, and of administrations been adopted, and it determines the within competence of the Ministry total budgetary funds, ant for the first of Finance, whose efficient work and time the revenues of state funds- Pen- positive results definitely contribute sion and Disability Insurance Fund, to the resume of economic and overall Health Insurance Fund, Development reforms which were realised in 2007 Fund and Employment Agency have and previous years. been included in the budget. After several years of very rigid I believe that the contents will policy of salaries, in the last two years attract attention of experts and wider there is an increase of salaries in the public. public sector. In 2007, it came to the increase of minimal labour price from Respectfully Yours, 50 to 55 eur, and from 2008, coeffi- cients of difficulty of the job will be increased for 30% for all employees in public sector. During 2007, amendments of exist- ing and adoption of some new tax laws were made, and in that way the main EDITOR goals are achieved from the sphere of Ana Miljanić Annual r­epor­t of the Mi­ni­s­tr­y of Fi­nance of Montenegr­o / 2007 Total Budgetary Receipts (of Current and Capital Budget) and Receipts of State Funds Plan of receipts of the Budget of Montenegro and state funds for 2008, was made based on realisation of revenues in previous years and in first nine months in 2007, of estimated growth of GDP, growth of retail proces and estimated fiscal influences of new regulations which will be applied in 2008. Based on stated parameters, current budgetary revenues in 2008 are estimated to 1.139,68 mil €. Budgetary revenues for 2008, earmark budgetary spending which will have a positive effect on GDP growth, increase of employment in the real sector and which will be used for regular servicing of legal and contractual liabilities.