Montenegro’s IRMS rollout highlights regulatory misalignment as digital tax reform advances

Montenegro’s push to modernise tax administration through full digitalisation is progressing, but the rollout of the Integrated Revenue Management System (IRMS) is exposing structural weaknesses in how regulation translates into day-to-day operations. The issue is not confined to technology: stakeholders say deeper inconsistencies between legal design and implementation are undermining legal certainty, efficiency and competitiveness.

IRMS aims to digitise processes, but complexity has shifted

IRMS was introduced as part of a broader reform intended to streamline procedures, remove paper-based steps and support real-time data exchange between institutions. However, at a recent roundtable organised by the Chamber of Economy of Montenegro in cooperation with the Tax Administration of Montenegro, representatives from both institutions and the private sector said the practical effect has been more about relocation of administrative complexity than its reduction.

Companies highlighted slow processing times, inconsistent application of rules and limited coordination among institutions as key bottlenecks. They said requests for documentation, company registration procedures and compliance processes continue to experience delays that disrupt routine operations—especially for firms active in public procurement, exports and labour-intensive sectors.

Regulatory fragmentation creates execution risk

A central concern raised by businesses is how IRMS interacts with the wider legal framework. Stakeholders pointed to misalignment between the Law on Companies and other regulatory provisions that they say creates ambiguity during implementation. In practice, this can force companies to manage overlapping or unclear requirements.

The result is described as execution risk: compliance may be technically possible within a digital system, but operational efficiency can still suffer when rules are fragmented or difficult to apply consistently.

Tax Administration says most processes are available electronically—but integration remains incomplete

Institutional feedback acknowledges constraints while emphasising progress. The Tax Administration said digitalisation is advancing, with more than 95% of business processes technically available in electronic form. It also noted that tens of thousands of tax filings and requests have already been processed through the system.

Even so, full functionality depends on integrating all relevant public institutions into IRMS. Many institutions are not yet fully connected to the platform, leaving gaps that can affect how quickly documentation is issued or requests are resolved.

Business impacts extend beyond paperwork into investment and hiring

For companies, the consequences are immediate. Delays in issuing certificates and difficulties accessing documentation—alongside procedural inconsistencies—are reported to affect investment timelines, hiring processes and participation in tenders. Rather than lowering administrative burden during early implementation, stakeholders say transitional friction is increasing operational risk.

Private sector calls focus on execution model and stabilisation measures

The private sector response is not opposition to digitalisation itself; it targets what it views as shortcomings in the execution model. Companies called for simplified procedures, clearer guidance, faster resolution of requests and more predictable communication channels with institutions.

They also expressed support for transitional mechanisms such as extended deadlines or hybrid processing options to help mitigate risks while the system stabilises.

A test of regulatory coherence for policymakers

For policymakers, IRMS has become a broader test of whether Montenegro’s regulatory framework is coherent enough to support digital delivery. Digital platforms can only generate efficiency gains when legal requirements and institutional structures align; without that alignment, digitalisation may amplify existing inefficiencies rather than resolve them.

The current phase therefore reflects a recurring pattern in administrative reform: the technology layer can move ahead faster than the regulatory and institutional frameworks designed to sustain it.