1. Ministry of Finance and the municipality BAR Secretariat for Economy and Finance Ministry of Finance and the municipality BAR Secretariat for Economy and Finance An example of good practice MUNICIPALITY OF BAR Projects: The real estate tax Market Value-Based Taxation of Real Property, Ljubljana,April 11-15,2011 An example of good practice MUNICIPALITY OF BAR Projects: The real estate tax Market Value-Based Taxation of Real Property, Ljubljana,April 11-15,2011 Acting Secretary's Klikovac Dejan M.Sc.

2. Law on Property Tax Montenegro is a country with about 620,000 inhabitants and is divided into twenty-one (21) units of local government. The reform of the tax system in Montenegro, as well as the overall financial system, begins in year 2001. The main goals of tax reforms are aimed at making the tax system simpler, more efficient and easier to implement and that the tax reform based on principles of simplicity, fairness, neutrality, efficiency, stability and applicability. Tax on property regulated by the Law on Property Tax ("Official. Gazette of RM" no. 65/01, 69/03 and 75/10), which entered into force on January the 1st 20 0 1, effective from January the 1st 20 0 2, the Decree on detailed criteria and methodology for determining the market value of real property ("Off. Gazette of RM" no. 23/03, 25/04, 40/04, 60/04 and 31/05) and the Regulations on the contents of the report on tax payment real estate ("Off. Gazette of RM" no. 33/05). On the basis of the Law and Regulation municipalities have adopted their own decisions on the introduction of property tax.

3. Law on Property Tax The new legislation committed the harmonization of tax treatment of real estate in Montenegro with international practice. The basic characteristics of international practices in property taxes as soon as can be summarized as follows: -Property tax is the only municipal tax and the taxpayer knows who is taxation, which amount to pay and what the purpose of payment of taxes is -Taxpayer is clear what is taxed and how to determine tax liability -Tax structure should be clear with few rates, exemptions and special treatment and release a ll taxpayers in the same way -Tax should be easily applicable and understandable to the taxpayers and the tax authorities -Municipal authorities are responsible for council rates and have the authority to set rates that are in accordance with municipal decisions. Subject to taxation Property tax paid on real estate located in Montenegro, including: land, buildings, residential buildings, business units and other buildings. Buildings and other buildings that are in separate ownership of land and housing units of buildings can be taxed separately. Tax Base The base property tax is the market value of the property at January the 1st of the year for which the tax is assessed. The main criteria for determining the market value of real estate is : allocation of real estate, property size, location of the immovable property, the quality of real estate and other elements that may affect the market value of real estate. Detailed criteria and methodology for determining the market value of real property prescribed by the Government of the State of Montenegro, the proposal by the Minister of Finance. The methodology aligns with market conditions, at least once in three years. Obligations from real estate tax occur e January the 1st of the year for which the tax is assessed. Market value of individual property, based on this methodology determined by the competent tax authority of local governments.

4. Introduction- municipalitiy of BAR * * Bar a modern city with wide boulevards,surrouned by Mediterranean vegetation,Bar represents the biggest tourist and nautical centre at the entrance to the Adriatic Sea.Two equally beautiful shores in the Municipality of Bar,those of the adriatic sea and Lake Skadar. * Secretariat of Economy and Finance consists of three departments and the Finance Department, department of local government revenues and the Department of Economics. * Projects: property tax, treasury and municipal power Cooperation - GTZ, SNV-property tax Cooperation with the Urban Institute-Treasuries * Adapted from the base year 2003, the Directorate of Public Revenues * The first software for corporate real estate ICMA When transferring a database ICMA has made ​​mistakes which caused delay in the work, and the software was not multi-user * The current software TerraSoft (application PN), Safe Software

5. SCHEDULE OF COMPUTER-TAX ON REAL ESTATE AND TREASURY IN THE MUNICIPALITY OF ELECTRONIC 10 licenci ETERRAPN + 2 TT USER REAL ESTATE JMB G Details of Eletronic ADDRESS OF REAL ESTATE Details of Eletronic ADDRESS OF REAL ESTATE Area m2 Area m2 sekretar y NO FLOOR PLAN, LOTS, LIST sekretar y NO FLOOR PLAN, LOTS, LIST IT ADMINISTRATOR IT ADMINISTRATOR KA D ASTAR SERVER KA D ASTAR SERVER account account SERVER SERVER cutting cutting DATA ENTRY, PRINTING SOLUTIONS, UPDATES DATA ENTRY, PRINTING SOLUTIONS, UPDATES CHANGES, THE PARTIES.. CHANGES, THE PARTIES.. server e-Municipality CHIEF ADMINISTRATOR (SECOND-INSTANCE) server e-Municipality CHIEF ADMINISTRATOR (SECOND-INSTANCE) 10pc 10pc The Citizens BureauLegal Service The Citizens Bureau Legal Service +T reasury +T reasury Protocol number, date of the decision Protocol number, date of the decision

6. Positive experience-Germany Wisbaden (records a bit.. every tree has a number) Positive experience-Germany Wisbaden (records a bit.. every tree has a number) They can easily lead to the spread of computers connected to the network. (The whole municipality is networked) They can easily lead to the spread of computers connected to the network. (The whole municipality is networked) On the server operating SQL and Oracle 9i database On the server operating SQL and Oracle 9i database Cadastre in the same building, LAN - Local Area Network.. Cadastre in the same building, LAN - Local Area Network.. The implementation process is not easy The implementation process is not easy Zone by the number of plots Zone by the number of plots

7. Treasury operations The project of effective local government, Urban Institute in the municipality of Bar is carried out a pilot project-introduction of local government treasury. Municipality of Bar is the first in Montenegro started with the implementation of treasury systems 01.januara 2005. The primary purpose of the treasury of local government to improve the implementation of financial management at district level in available funds. This is primarily achieved by introducing modern financial management information system that includes computerized accounting, based commitments and spending control, a system for cash and debt management and financial reporting. (timeliness, reliability, clarity, simplicity, transparency) Treasuries based on the principle of carrying only recording of cash transactions through the Consolidated Treasury Account, all in accordance with the Law on Local Government Finance, Instruction on the Treasury and international accounting standards for the public sector. REPORTS DAILY, WEEKLY, MONTHLY, YEARLY The project of effective local government, Urban Institute in the municipality of Bar is carried out a pilot project-introduction of local government treasury. Municipality of Bar is the first in Montenegro started with the implementation of treasury systems 01.januara 2005. The primary purpose of the treasury of local government to improve the implementation of financial management at district level in available funds. This is primarily achieved by introducing modern financial management information system that includes computerized accounting, based commitments and spending control, a system for cash and debt management and financial reporting. (timeliness, reliability, clarity, simplicity, transparency) Treasuries based on the principle of carrying only recording of cash transactions through the Consolidated Treasury Account, all in accordance with the Law on Local Government Finance, Instruction on the Treasury and international accounting standards for the public sector. REPORTS DAILY, WEEKLY, MONTHLY, YEARLY

8. Treasury operations Consolidated treasury account includes all accounts on which is recorded the state money, which are a function of the municipality or the consolidated treasury account shall be paid all remuneration and from all payments from the budget. Treasury is realized through the exercise of the following functions, namely: Financial Planning Cash management Expenditure Control Debt Management Budgetary accounting and reporting and Financial management information systems

9. Analysis of charge € property tax collection at 31.12. 20092010% 17169032628495,33153,10 COMPARISON OF THE LAST TWO YEARS 2010 a record year in the charge up NOW

10. Analysis of charge € property tax collection as of 02.04.

11. Chart supervise the collection of property tax in the year 2007,2008,2009,2010 JANFEBMARAPRMAJJUNJULYAUGAUGSEPTOCTOCTNOVDECTOTAL 200773362317672488221702358227537115804726120218976294415101152148507 € 1.215.991 20081126896005893559826173740260086138445278076315506191672154091192719 € 1.716.920 200940744489273480613062964167249219257955582930370071284604246703317740 € 2.628.495 2010575986977311467964458106363209303486066529183308746598341205602366970 € 3.117.082

12. Training Information system contributes to the improvement of collection, enforcement needed.. mortgages.. Information system contributes to the improvement of collection, enforcement needed.. mortgages.. realizes the process of training staff (ECDL and others) realizes the process of training staff (ECDL and others) Understanding of relevant, especially the Mayor, Zarko Pavicevic contributes to efficient removal of barriers that occur in this job Understanding of relevant, especially the Mayor, Zarko Pavicevic contributes to efficient removal of barriers that occur in this job Good cooperation with the Service Chief Administrator, the appellate Good cooperation with the Service Chief Administrator, the appellate Knowledge, efficiency, project guillotine Knowledge, efficiency, project guillotine LONG-TERM PLAN LONG-TERM PLAN Great effort, job, database should handle Great effort, job, database should handle Faster work performance, satisfaction? Faster work performance, satisfaction?

13. Plans Project...Fiscal Cadastre-TAX Project...Fiscal Cadastre-TAX LAMP- Land Administration and Management LAMP- Land Administration and Management project(World bank) INSPECTION-in during last 12 months found in the field of new ca.. 300.000m2.. DAILY REPORTS INSPECTION-in during last 12 months found in the field of new ca.. 300.000m2.. DAILY REPORTS (there are illegally built objects that are not registered, the number of objects in the records has a much smaller surface area than the actual on the ground, a number of buildings and land in the base (real estate management) lead to the wrong purpose (business and residential, construction, ruins, culture, land..) (there are illegally built objects that are not registered, the number of objects in the records has a much smaller surface area than the actual on the ground, a number of buildings and land in the base (real estate management) lead to the wrong purpose (business and residential, construction, ruins, culture, land..) Reduce the tax base and it is filled by all taxpayers Reduce the tax base and it is filled by all taxpayers TEAM WORK VERY IMPORTANT TEAM WORK VERY IMPORTANT

14. REPORTS ON MUNICIPAL TAX ON REAL ESTATE FOR 2010. Serial n. name of the municipality the amount of market value amount of the tax amount of tax collectedother billing Collection rate BUIDINGS LAND TOTAL 1Andrijevica106.685.968157.862.649264.548.61799.97741.97058.00741,98 2Bar3.162.834.557551.287.7383.714.122.2954.447.3743.107.6841.339.69069,88 3Berane378.346.353618.696.783997.043.136411.820128.014283.80631,08 4Bijelo Polje839.281.959 657.819210.967446.85232,07 5Budva3.434.020.805 5.930.8594.565.5491.365.31076,98 6Danilovgrad 0214.50296.809117.69345,13 7Žabljak120.750.51110.656.200131.406.711183.702105.92177.78157,66 8Kola š in868.593.8061.624.896.3662.493.490.172875.236735.591139.64584,04 9Kotor1.203.937.750 1.627.022942.623684.39957,94 10Mojkovac131.907.704345.620.350477.528.054189.80188.359101.44246,55 11Nik š ić1.287.091.0324.878.094.9226.165.185.9544.491.8092.785.0591.706.75062,00 12Plav297.156.859309.532.058606.688.917239.822109.893129.92945,82 13Plužine164.216.365 1.141.2561.421.958-280.702124,60 14Pljevlja 0221.62076.041145.57934,31 15Podgorica6.097.326.679156.365.9766.253.692.6556.713.1392.415.7304.297.40935,99 16Rožaje 265.898.052 188.29039.533148.75721,00 17Tivat1.029.026.022739.941.9801.768.968.0021.568.6991.010.398558.30164,41 18Ulcinj 01.560.260811.829748.43152,03 19H.Novi1.514.635.104976.029.0602.490.664.1642.977.9572.230.774747.18374,91 20Cetinje 0457.009136.736320.27329,92 21 Š avnik25.746.569 61.06515.86745.19825,98 UKUPNO:20.661.558.04310.634.882.13431.296.440.17734.259.03821.077.30513.181.73361,52

15. THANK YOU