Montenegro’s Fiscal Strategy for 2024-2027 includes a plan to introduce an excise duty on electricity, which would be implemented upon the country’s entry into the European Union. This measure is part of the requirements for EU member states and aims to align Montenegro’s regulations with EU Directive 2003/96/EC, which governs the taxation of energy products and electricity.
The draft Fiscal Strategy does not yet estimate the fiscal effects of this excise duty as it pertains to the period beyond the strategy’s validity. Montenegro is expected to join the EU around 2028, and thus, discussions on the excise duty are considered premature at this stage. The Ministry of Energy has indicated that the implementation of such excise duties would be in accordance with EU regulations but noted that individual member states have the discretion to determine their tax measures related to energy products and electricity, which means they could choose not to increase the tax burden.
For context, in Croatia, the excise duty on electricity was introduced on July 1, 2013, with a rate of 0.5 euros/MWh for business customers and 1 euro/MWh for non-business uses. However, this duty does not apply to residential customers or certain industrial processes. In Serbia, a similar excise duty was introduced in 2015 with a rate of 7.5%, plus a 20% VAT, applying to both households and businesses.
