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Gitanas Nausėda head of state discussed this at a meeting on Friday and Finance Minister Gintarė Skaist se also met.
Expect fairer taxes
“It is really gratifying that the Minister is preparing to start a project to increase tax justice and is already considering certain changes.
Of course, after this discussion with the public, experts, discussions, weighing the costs and benefits and making concrete proposals on how the tax system could be fairer, this spring session (the spring session of the Seimas begins on March 10 , ed.) “. – On Friday, after the meeting, the adviser to President Simon Krėpšta told reporters.
According to him, the reduction of the shadow economy was also discussed, as the minister presented plans on how to do it. If the shadow were reduced to the European level, an additional 2 billion would be raised in the state budget. by year.
When asked what is the tax justice to be pursued and for whom the benefits will be abolished, S. Krėpšta said:
“Tax justice consists of two main parts. First, as you well mentioned, there is the question of preferences. We certainly have a series of tax benefits and it is necessary to review which benefits, which do not provide those benefits, but which create some tax injustice. So it really makes sense to remove those benefits.
Another issue is the so-called livestock tax issue, where different rates are applied depending not on the amount of income earned but on the way the income is received. It also distorts our tax system. “
According to the president’s adviser, in order to implement the idea of a welfare state, Lithuania needs to redistribute more of the gross domestic product through the state budget. Now our country’s budget is quite small, and in part this is the case of a large-scale black economy.
“The foundation of the welfare state is good quality public services and a wide range of public services, such as education, health care and all the others.
Adequate financing is essential for the quality of public services, in addition to the efficiency of these sectors. Well, here we see that with one of the smallest budgets in the EU, we really cannot guarantee adequate funding for public functions, ”said S. Krėpšta.
He assured that the experts will first do their work and then they will be discussed with the public. Only then will it be clear which benefits would be denied and which population would be affected.
All benefits will be reviewed
G. Skaistė mentioned that during the meeting with the president they also discussed the expenses to handle the coronavirus crisis.
The minister did not answer how much additional funds are expected to be raised due to the reduction in the share of the shadow economy.
Among other things, G. Skaistė specifically mentioned tax benefits for fossil fuels. These would be a lower excise duty on labeled diesel, a reduced value-added heating.
The minister expects the laws to be passed on July 1 and come into effect early next year.
Following a review of tax incentives, a second phase will consider the transition from personal income tax to general family taxation.
The Lithuanian Christian Democrats of the National Union, represented by the minister, have envisaged further fiscal redistribution in their program. The president has also repeatedly said in public that it is necessary to increase tax collection to build a welfare state, adequate funding for public services.
About a billion was not raised in the state budget last year. expected revenue of EUR. At the time, the costs were much higher than planned. Therefore, the state must borrow to cover the budget deficit.
To pay off debts, the state needs more income or less expenses. It is hardly possible to reduce them, since a large part consists of various benefits, pensions, public sector salaries. Consequently, in the future it may be necessary to raise taxes or expand your circle of taxpayers.
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