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111 Seimas members voted to increase the NPD, 0 against and 1 abstention.
The law has not yet been signed by the president for the law to take effect. The amendments to the law would take effect on July 1 of this year. and power until 2020. December 31
€ 50 higher – € 400 NPD would apply for all of 2020. Previously, such an increase was planned from 2021 onwards.
A € 50 increase in the NPD budget for this year should be found at around € 84 million. euros
According to the head of state, increasing the NPD will further increase the income of those who earn less.
By another initiative of the head of the country: from the end of December to 20 to 15 percent. To reduce the personal income tax (PIT) rate, the Seimas did not approve it.
In May, the president proposed to advance the NPD increase to 400 euros. The NPD currently applicable to the population is calculated according to the formula: 350 – 0.17 x (salary – monthly minimum wage). In the bill presented by the President, the formula looks like this: NPD = 400 – 0.19 x (DU – MMA).
Members of the Lithuanian Peasants and Greens Union (LVŽS) faction and the Government supported G. Nausėda’s proposal to increase the NPD, but opposed the goal of reducing the GPM.
The government report states that the tariff reduction is not in line with its program: EUR – 1117 EUR, that is, and. almost 14.5 times more. “
The Seimas Committees on Social Affairs and Labor and Budget and Finance (BFK) also spoke in favor of increasing the NPD, but against reducing the tariff.
During the discussion before the vote, the member of Seimas Povilas Urbšys proposed to return to the GPM reduction for people receiving 1.5 average wages (VMU). He points out that wages range between 600 and 2,701 euros.
“This proposal would remove our society from the dependent relationship between the state and the people. And it would allow us to anticipate a deteriorating situation in the future, which will require additional funds from the budget and this will be addressed again in lump sums, as has been done now, in the production of lump sum bags. I would invite you to compromise, “said P. Urbšys.
The BFK did not support this proposal, since it would cost municipalities and the state budget around 280 million. EUR.
Algirdas Butkevičius supports the amendment: “We often talk about income inequality. If in 2015 up to 1 VMU in the labor market it was 72 percent. employees, this is 2020. the percentage remained the same in the first quarter. Over the five years, income inequality in the labor market has remained the same. We have been able to achieve all of this through the previous tax reform. “
Mykolas Majauskas says that with the focus of the elections, the number of people willing to share government gifts is growing: “Today we see a populist solution that increases the deficit and debt. I will point out that this is not aimed at those directly affected by the pandemic or quarantine, but is simply trying to spray money before the election. This is not driving the economy in any way, as it will focus on the middle-income people who will consume a large proportion of imported goods. If we stimulate, we will greatly stimulate the economies of Germany, Russia or China.
This is a temporary tax cut that will in no way make Lithuania more competitive and will in no way help attract foreign investment or encourage investment in general. (…) This does not solve systemic problems in any way. In the end, it will cost a lot of money: 280 million. Eur for half a year. “
The Seimas voted 33 in favor of the P. Urbšis amendment, 35 against and 40 abstentions, but did not support the reduction of the PIT.
In the graphs you can see how the proposal to increase the income of the population affected by the NPD “in the hands”.
For example, an employee who receives about 800 euros “in their hands” would receive a supplement of 9 euros due to the increase in NPD, earning MMA – 10 euros and earning 1,200 euros – almost 8 euros.
Currently, 20% is applied to labor income of up to 7 VMUs per month (9667 euros on paper, about 5850 euros available). GPM rate. The portion of income that exceeds this limit is taxed at 32%. tariff.
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