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It is true that neither the current nor the future government is quick to say that this tax will be extended or increased in the near future. Lithuania has also made little progress in improving the quality of education.
In the Vilkaviškis district, Virbalis city, men waving forks and rakes joke, for whom already, and the coronavirus will not take away their work: “In autumn, leaves, snow in winter, grass in spring, a whole year of job”.
It is true that working for the minimum wage, 450 euros a month, is not rewarding, but the guard Mindaugas would like a higher salary: “And who doesn’t want it? Everyone would like to bring it all up, at least gradually, at least gradually. “
Starting in January, the minimum wage will increase by about 20 euros. However, poverty and social exclusion remain the biggest problems in Lithuania. This is also emphasized by Angel Guria, Secretary General of the Organization for Economic Cooperation and Development, who conducted our economic analysis.
“Poverty is high, especially among the unemployed, those with less education, the elderly and single-parent families. Taxes often help reduce this exclusion, but in the case of Lithuania, taxes are not adequately redistributed,” he says. the Secretary General of the OECD, A. Gurria.
The Secretary General discussed the situation in Lithuania remotely with President Gitanas Nausėda, Acting Minister of Finance Vilius Šapoka and candidate for Minister of Economy and Innovation Aušrine Armonaitė.
According to the analysis, Lithuania’s economic situation is strong, the country is catching up with the more developed OECD countries, and emigration indicators are improving. However, the wealth that the president and other politicians talk about is unevenly distributed in Lithuania. One in five Lithuanians is still poor. The presidency explains that it will continue working to review tax rates.
“Different rates to tax different types of income are not fair and reduce tax revenues. The shadow issue is also a very important issue, ”says Simon Krėpšta, adviser to the president.
It is true that the Skvernell Government continues to repeat that progress has been made in this area. And for now, we must think about how to save the economy and companies from the effects of the coronavirus pandemic. Like the European Commission, the OECD forecasts an economic recession of two percent for Lithuania this year and growth of almost three percent next. Unemployment is expected to grow at a similar rate: almost 9% this year and 8% next.
According to Angel Gurija, although Lithuania’s debt has risen sharply, the first step is to win the battle against the coronavirus, and debt reduction should start only when the economy starts to recover.
“Poverty and social exclusion will be solved with long-term measures, in the first place I would see education. If the family lives hard, but no matter where they live, the child has the opportunity to go to a good school, they are likely to come out of the circle of poverty and come out strong, ”says Aušrinė Armonaitė, president of the Freedom Party.
The organization also paid close attention to Lithuanian education. The main conclusions are that the efficiency of primary and basic education in our country is low, Lithuania spends excessive costs on maintaining small schools. Vocational training in Lithuania does not provide students with the necessary skills and the reform of higher education has not brought the expected benefits.
The OECD also pays considerable attention to the environment. The organization makes it very clear that Lithuania must become “greener” and that our country must introduce a tax on CO2 or pollution.
“It just came to our knowledge then. Why? Because if you have to pay a higher price for pollution, you will try to avoid polluting the environment,” Gurría said.
The current government introduced a car tax in July, and by the way, it has already raised 11 million. euros. But the next government promises to review it. The tax is now applied once, when buying a car, based on average emissions. However, Armonaitė says the new coalition has not yet discussed this tax.
“The only and main thing I would like about that tax is that it really talks about pollution, and not how we currently think about cars, when it taxes just for owning a car,” says A. Armonaitė.
“This is a much healthier tax for the economy than a higher tax on employment-related income,” said Acting Finance Minister Vilius Šapoka.
The OECD also calls on the Lithuanian government to continue investing in rural areas and reduce the number of state-owned companies.
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