Economists on A.Armonaitė’s proposal to attract migrants with the benefit of GPM: it is discrimination | Business

15 minutes recalls that on Wednesday, the Minister of Economy and Innovation Aušrinė Armonaitė made famous the idea of ​​how to withdraw emigrants: apply the PIT benefit to people who have not participated in the Lithuanian labor market for 5 years. These workers could benefit from an 8% reduction if they earn at least 2 median wages. GPM rate.

It is claimed that this would be an attempt to recover Lithuanian talent that had gone abroad, while attracting foreigners.

READ MORE: Ministry of Economy analyzes how to recover emigrants: GPM will offer a new relief

However, the idea does not seem to appeal to Prime Minister Ingrida Šimonytė. Reporters were asked to express their opinion in the Seimas on Thursday, and the prime minister did not wrap the words in cotton.

“In Lithuania, it is very popular to offer benefits for all aspects of life, but you have to understand one very simple thing: the public sector, which is education, health, social security, national defense, operates only with the taxes paid by taxpayers. So if returning Lithuanians want quality health care and education, it is natural that taxes are needed to finance it, “he said.

Meanwhile, the Ministry of Finance 15 minutes He replied that analytical work was being carried out and data was being collected on how many people could benefit from such a facility and how much it could cost. Therefore, it is a bit premature to comment so far, according to representatives of the ministry.

Economists view it negatively

OR 15 minutes Economists interviewed, although they agree that Lithuania should compete for talent, but not in that way. Indrė Genytė-Pikčienė, chief economist at the asset management company INVL Asset Management, thinks this offer is very strange. Especially considering those specialists who live in Lithuania and chose not to leave.

“Such an incentive to attract is naturally detrimental to those talents who have chosen to stay.” 15 minutes she said.

Also, according to I.Genytė-Pikčienė, the amount of the tax for high-income specialists is not significant and their choice of where to live and work is made for other reasons. The expert believes that Lithuania is already on the right track, so it is not a good way to highlight a certain category of people.

The economist is also surprised by this proposal in the context of the government’s work. The Finance Ministry has convened a working group to review tax incentives and is working to reduce their number.

I.Genytė-Pikčienė believes that if such a proposal is approved, IT specialists and others with high incomes could be tempted to leave for five years, for example in the Canary Islands.

“A very shortsighted offer,” said the interviewee.

Sigismund Mauricas, Luminor’s chief economist, shares this view, which tends to be even more negative about considerations for reducing the GPM for returnees.

“The main disadvantage of this proposal, which overshadows any advantage, is that it is discriminatory. And perhaps not very honest about those who have not emigrated. If you have lived in Lithuania for many years, you are improving, and new companies and products will not receive benefits. And here you will receive a person who comes from a third country or who has emigrated. It could even lead to a bit of anger or even emigration, ”he said.

Competition will increase

According to I.Genytė-Pikčienė, Vilnius, Kaunas and Klaipėda, compared to other European cities, are comfortable to live in, so the situation should not be complicated. However, in his view, for people to return from abroad, the government should pay more attention to adequate public services and a tax system that is convenient, flexible and does not require additional efforts to pay them. Reputable stories about inefficient use of budget funds should also be avoided.

“But it’s not easy to do, it takes a long time, and politicians often like to play at rates to get a quick result. Because it is much easier. It’s fast, you see a tangible result, a part of the electorate is attractive and favorable. And it is not necessary to carry out painful surgical reforms, which are rarely popular and attractive, but necessary, ”said the economist.

And Maurice points out that the further away, the more states will compete with each other for workers.

“Employee mobility has increased, there is a lot of work that can be done remotely. The best example is the United States, where states are simply stapled together to attract workers and there are extremely extreme numbers, sometimes down to zero, to cut taxes, ”he explained.

Ž.Mauricas believes that Lithuania should already get involved in this game and it would be nice if we took the lead in the race. According to the economist, the country should consider reducing the personal income tax.

“It would be especially dangerous if Lithuania started moving in the other direction. For example, the British have now increased their social security contributions as a low openness state, which would certainly be dangerous,” he said.