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Simonas Krėpšta, Senior Advisor to the President, introduced the economic stimulus package proposed by President Gitanas Nausėda and stated that it was aimed at working people and families raising children.
“The entire economic stimulus package will neutralize the negative impact of lower wages, ensure higher incomes for those who earn less, and prevent emigration,” said S. Krėpšta.
Photo by Luke April / 15min / Simonas Krėpšta
G.Nausėda offers GPM until 2020. reduce by 5% by the end of the year. points for the salary component of up to 3 average salaries (that is, up to € 3,724.2), while the maximum applicable NPD increases by € 50 to € 400.
The President also proposes an allowance of € 120 or € 200 for children in July.
Photo by Sigismund Gedvila / 15min / Gypsies Nausėda
The Seimas adopted this bill for consideration on Tuesday after its introduction.
According to the calculations of the Ministry of Finance, this proposal by G.Nausėda would be the most useful for those who earn 2-3 thousand. euros before tax.
Initially, the President proposed a temporary reduction of the personal income tax (PIT) for the entire population of 20 percent. up to 15%, but this proposal has received much criticism from FM’s calculations that the biggest winners will benefit from such a change.
EC forecast: wages will be the lowest in Lithuania
S.Krėpšta stated that such a lower temporary taxation of labor income is especially necessary at the moment, because the European Commission (EC) predicts that wages in Lithuania will decrease by 8% this year. – mainly throughout the European Union (EU). Such trends, according to S.Krėpšta, can provoke the second wave of emigration.
“We are the first in the end in terms of the projected decrease in wages, which will reach 8%. – Far above the EU average. We cannot allow this to happen as we did a decade ago, when we lost 10 % between 2007 and 2017. its population. This reduces the potential growth of GDP and public income “, emphasized S. Krėpšta.
The presidential adviser opposed the argument that this proposal will bring the greatest benefits to those who earn the most.
“The greatest benefit of the entire package will be felt by those with the lowest incomes, if they have two children, later that relative benefit would decrease,” S. Krėpšta presented his calculations.
Another argument from the Presidency, which tried to persuade the Seimas to support this project: capital income in Lithuania is taxed less than from labor income, so a fairer tax system would be temporarily applied; Both capital and labor income would be taxed at the same rate.
Before the Seimas vote, Algirdas Butkevičius, a member of the Seimas and a Social Democrat, pointed out that the main income of the state and municipal budget comes from taxes, so he asked who would compensate the losses.
Julius Kalinskas photo / 15min / Algirdas Butkevičius
To this S.Krėpšta replied that the laws currently in force stipulate that if during the course of the year the Seimas makes decisions that reduce income to municipal budgets, the losses must be compensated by the central government and propose to use part of the 5 billion for economic stimulus. which until now have been used quite slowly.
Responding to Seimas member Mykolas Majauskas’ observation that these proposals will further inflate spending, S.Krėpšta agreed that after considering these initiatives, the state budget should be adjusted.
The rulers will offer their choice.
Ramūnas Karbauskis, the leader of the peasants, said Tuesday morning that the rulers would support G. Nausėda’s proposal, but would record a version of his proposal in later stages: “Then it will be completely clear what we support.”
Sigismund Gedvila photo / 15min / Ramunas Karbauskis
“The proposal to reduce the GPM is, in our opinion, socially wrong, because the people … who would receive such a benefit, would actually use those funds, it can be assumed that they are not used for consumption, but to save. And all the funds that are now allocated are intended to promote consumption so that the economy can spin, “said the president of the Union of Peasants and Greens of Lithuania.
According to him, increasing the NPD will help those who earn the least, therefore, the authorities will support this proposal.
Finance Minister Vilius Šapoka told reporters on Tuesday that he was cautious about any tax proposals, especially those related to the GPM reduction.
Photo by Julius Kalinskas / 15min / Vilius Šapoka
“I don’t know how long the pandemic will last, so we cannot waste public funds: a 5% reduction in GPM. It is not about solidarity. A simple example: 10,000. An employee who receives 200 euros will receive an additional 200 euros per month , which is definitely not about solidarity, “said the minister.
On Monday, the President signed a memorandum with organizations and unions representing companies, in which some companies promised not to reduce people’s wages to the extent that the GPM rate would be reduced in the Seimas if the proposals for G. Nausėda.
Prime Minister Saulius Skvernelis said that “not everything is regulated by memoranda, which have no legal force.”
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