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For decades, Lithuanian workers received less than 60 percent of what they earned; the rest went to Sodra or the state budget. After the implemented tax reform, started by former Finance Minister Vilius Šapoka and publicly dubbed “a billion by a million”, it was easier for employees to relax.
36.9 percent: A single employee in Lithuania paid such a record low share of contributions and taxes from last year’s salary, the International Organization for Economic Cooperation and Development (OECD) calculated.
And it is still higher than the average of the countries that make up this organization, with 34.6 percent. Lithuania ranked 18th out of 37 countries.
Lithuania has managed to reduce taxes paid by employees by 8.8 percentage points in twenty years, as in 2000 the state paid back up to 45.7 percent.
Even more progress has been made among workers with children, whose taxation is already lower than the average in the developed world.
If there is an employee and two children in the family, then the “net” tax is only 20.1 percent of salary; it remains in the hands of about 80 percent, because a large part of the contributions is returned with the child’s money. By comparison, in the average developed country, such a family would be taxed at 24.4 percent. part of taxes and contributions.
Single workers in Belgium, Germany and Austria have the highest taxes among developed countries, where they earn around 50 percent. The lowest taxation is found in Colombia, where employee taxes are 0 percent. – Taking care of a pension and paying contributions here is optional.
Swedbank’s chief economist, Nerijus Mačiulis, sees that the increase in wages in recent years is partly due to the withdrawal of the shadow due to lower taxes.
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