Sudden Impact: Montenegrin whistleblower helps to reform broken tax system

In a rare case of public whistleblowing in Montenegro, customs inspector Siniša Raičević told Coalition journalists that imported heating fuel has been improperly taxed for months. The mistake resulted in a loss of more than €100,000 to the country’s public budget.

The Centre for Investigative Journalism of Montenegro (CIN-CG) reported in February 2020 that more than 1,300 tonnes of liquid petroleum gas imported between last June and September were taxed at the lowest possible excise duty.

In an even more rare event – in Montenegro or in any country, for that matter – government officials responded to Raičević’s revelation by submitting legislation to Parliament intended to end the “misuse” of excise tax rules, CIN-CG reported.

Raičević has warned for years that the improper taxing of fuels was causing “great damage” to Montenegro’s public budget, according to CIN-CG. Although Raičević was given whistleblower status under the Law on Prevention of Corruption, managers at the Customs Administration have denied any misconduct in levying taxes.

Raičević discovered the problem while visiting fuel importers as part of his official duties. He learned that fuel originally imported for heating purposes was being transferred from large tanks into smaller bottles and sold at retail outlets. Because of this, Raičević wrote in his official complaint obtained by CIN-CG, the fuel could be used for other purposes such as in heavy equipment and gas lamps, and should be taxed at a much higher rate. He also noted that heating fuel is not permitted to be sold at retail outlets where petroleum products are sold.

In addition to the fuel tax errors, Raičević also says the Customs Administration allowed misconduct in cigarette exports to Lybia and elsewhere, and improper shipments of copper to Serbia and other countries.

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