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These proposals are presented to the Fiscal Review Working Group convened by the Ministry of Finance by President Gitanas Nausėda.
On Thursday, they were presented to the public by the adviser to President Simonas Krpšta.
“First, given the post-pandemic period and the economic challenges posed by the pandemic, we are offering a new tax incentive for companies that are rapidly increasing wages or hiring new employees.
They could take advantage of the income tax refund if their salary fund increased by more than 8% compared to the previous tax period, ”S. Krėpšta told reporters on Thursday.
According to the adviser, the Lithuanian economy probably shrank less last year compared to other EU countries. However, unemployment has risen, probably the most.
“It just came to our attention then. A proposal is precisely this: a new tax incentive to quickly increase salaries or hire new employees. Those companies that do so would receive a corporate income tax credit,” explained the president’s adviser.
According to him, there is a clear problem of tax injustice in Lithuania, when employees pay higher taxes than those who receive particularly high income from other types of income: dividends, capital gains (for example, interest, sales of shares), activities individuals (such as lawyers, notaries, farmers, etc.).
According to the president, the time has come and the time has come to eliminate this injustice. And the president proposes that high dividend income, high individual activity income and high capital gains income be taxed at 20 percent. Tax rate. The progressive rate is the same as the standard income rate for employment income, ”said S. Krėpšta.
We remind you that the maximum income tax rate for non-earned income is now 15%.
More than 20 percent. the tax rate, at the proposal of the President, should be applied to those revenues that exceed 35 thousand. euros a year, or about 3,000. per month.
Finally, the presidency proposes that all tax changes should not take effect before 6 months, or a few months or less in advance.
“All three proposals really aim to increase the equity and stability of the tax system. This is important both to adequately finance public services and to increase the sense of justice, which according to research also contributes to a greater willingness to pay taxes in a manner fair ”, concluded the advisor.
S. Krėpšta assured that there is close cooperation with the Ministry of Finance regarding possible tax changes. The advisor hoped that this year it will be possible to approve changes to the law that make the tax system fairer.
The Presidency has repeatedly drawn the public’s attention to the fact that, compared to other countries, Lithuania collects less taxes.
Furthermore, we are close to the average of the European Union and other developed countries in terms of the country’s gross domestic product per capita. However, staff salaries are much lower.
On the other hand, when various tax incentives allow some groups of the population to pay relatively little income tax, even if they earn a lot of income.
Currently, the Ministry of Finance is waiting for suggestions from all interested parties on how the current tax system should be changed, what tax incentives should be abolished.
It is planned that after public discussions, the Seimas will have amendments to the tax laws. They are expected to be adopted in July and come into effect early next year.
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