The government program includes a new income tax regime and the abolition of benefits

The 127-page document establishes, among other things, that the government will work to ensure that the tax system is predictable and aligned with the need for public spending, and that the changes discussed contribute to more socially fair taxation, giving priority to taxes. less detrimental to growth.

It is taught that the formation of the state budget should be clearly linked to the strategic objectives of the state, the tax administration should be more customer-friendly, a more efficient use of data would guarantee a higher level of service and control, and access to financing for innovation and development would be equal to the EU average.

The goal for 2030 is to reduce the value-added tax gap (the difference between theoretical and actual revenue collection) to 10%, from the current 25%.

It is also desirable to reduce the S80 / S20 income inequality indicator (the proportion of one fifth of people with the highest income and one fifth of those with the lowest income) to 5, from 6.4.

Will perform the analysis

Various initiatives will be used for these purposes. In particular, the tax system should be stable and predictable.

In addition, a cost-benefit analysis of tax incentives is planned.

“Tax costs incurred for loss of income due to various benefits should be evaluated in terms of costs and benefits in the same way as budgetary expenses. Therefore, we will assess in detail the suitability and impact of tax incentives, review tax incentives and special conditions that distort tax justice, create tax arbitrage and promote shadowing.

We will also ensure fiscal transparency, a clear and publicly available monitoring of the benefits applied, which will help evaluate the impact and benefits of the benefits for society, companies and the state budget, ”the document reads.

A new beginning

The draft program also states that in the long term it would be necessary to move to the family (home) as a taxpayer.

“Such a principle would allow a more specific use of income tax for social policy purposes, ensuring that income tax takes into account not only the amount of income, but also the number of dependents available,” the authors explain.

Going forward, priority will be given to taxes that are least damaging to a slower growing economy.

“We will assess the possibilities of modifying the corporate income tax by waiving the tax on reinvested earnings. We will also seek to reduce dependence on budgets on indirect taxes such as VAT and excise duties. Based on the structure of tax revenues, Lithuania it relies too heavily on indirect taxes and cannot even collect a significant part of them. The least damaging sources of tax revenue for the economy, such as property taxes and environmental taxes, are among the most modest in Lithuania so far, so we will give them priority ”, the document reads.

It is also planned to review the principles of public investment, increase the financial independence of municipalities, develop a public debt management strategy, expand shadow reduction measures and digitize the activities of the State Tax Inspection.

The new government would like to improve the taxation and tax administration of small and medium-sized enterprises.

Green transformation

The draft program foresees the implementation of a green tax reform.

“By 2024, we will remove all tax incentives for fossil fuels and completely abandon the use of coal and oil products in the heat sector.

We will refocus sector fiscal policy on environmental objectives, expand producer responsibility, and ensure that the “polluter pays” principle is applied to reflect the true cost of natural resources.

We will direct the taxpayers’ money saved and additionally collected to strengthen the wave of green change and reduce the tax burden of the most vulnerable population, ”the document reads.

The aim is for the Lithuanian economy to gradually become climate neutral and circular, and for our home and business to be powered solely by green energy and heat.

The Lithuanian Green Course also aims to expand the generation of green electricity, promote the development of generating consumers, improve the electricity distribution network, create a basis for hydrogen energy, and ensure the monitoring of energy prices. .

Will create high added value

The program also highlights the goal of making Lithuania a country with high added value.

The indicator for 2024 is that Lithuania would move from 40th to 35th place in the Global Innovation Index, and in 2030 it would reach 20th place.

Another indicator for 2024 is that Lithuanian labor productivity would increase to at least 85 percent. The EU average was 75% in 2017.

The share of high-tech production in Lithuania’s total production in 2024 should be at least 7%, while in 2017 it was 3.6%.

The goal for 2030 is for public and private sector investment in research and experimental development to reach 2%. GDP.

“To create a competitive, high-value-added economy, we will strive for both the state and businesses to invest more ambitiously in research and experimental development. We will create real incentives for businesses to invest in research, so that investment from the private sector eventually reaches at least the EU average. We will ensure that European Union, state and corporate investments are used for transparent and sustainable projects, using clear criteria, “says the project.

The project identifies the following government principles: open data, accountability, discussion and solutions based on knowledge, cooperation, reconciliation of interests, reputation building, open government communication.

On Tuesday, Prime Minister Ingrida Šimonytė, appointed by the Seimas, is scheduled to present the program of the future government. Once considered by the Seimas committees, parliament should approve the program. In this way, powers are granted to the Government, and then the members of the Government take the oath in the Seimas.