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The Cabinet of Ministers approved the conclusion prepared by the Ministry of Finance, which was requested by the Board of Seimas.
“We propose to support (…) the amendments to increase the NPD, since the lowest beneficiaries would be the most benefited, it would undoubtedly make a more specific contribution to reduce poverty and income inequality and, consequently, could justify and justify those additional $ 84 million, Finance Minister Vilius Šapoka said at the meeting.
However, according to him, the ministry supports the direction of reducing the tax burden related to employment, but proposes not to reduce the personal income tax.
“Reducing the rate for the entire population would not be in line with the Government’s program or the recommendations of international institutions on reducing poverty and income inequality through fiscal measures. By reducing the rate, residents with more income would feel the greatest benefits, ”said V. Šapoka.
According to him, the bill aims to encourage consumption, but it is low-income people who spend most of their additional income when recipients are more savings-oriented.
“The loss of budget revenue for half a year would amount to some 400 million. Given the reasonable risk that the period of tariff reduction could be extended, which has been the case so far in Lithuania, the losses for the whole year would amount to some 715 million euros. ”Argued V. Šapoka.
20 percent. up to 15 percent. The GPM Presidency proposes a temporary reduction, until the end of the year, and to apply it to employee earnings up to three average wages (VMU), in the first quarter of this year it would be 3724 euros (before taxes). Now 20 percent. GPM applies to income up to 7 VMUs and above: 32 percent.
The President also proposed to advance the planned increase in NPD and introduce a higher NPD of € 50 (€ 400) earlier this year.
The government also approved initiatives by the president on Wednesday to amend the Legislative Framework and the Tax Administration Law. They propose a new clause so that the tax change laws can take effect less than 6 months after their official enactment in exceptional circumstances, such as the COVID-19 epidemic this year.
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