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“It just came to our notice then. The administration of these taxes could be fairer,” the finance minister spoke at the working group meeting on the review of tax benefits on Wednesday.
Rūta Bilkštytė, Deputy Minister of Finance and Chairman of the Tax Incentive Review Group, stated that currently in Lithuania, car, depreciation, rental and operating costs are deducted from companies’ income. In total, 208.6 thousand are registered in our country. passenger cars registered in the name of companies.
“In 2020, about 670 companies bought 770 luxury cars, if we think that luxury exceeds 50 thousand. euros. According to the practice of the European Union, at least nine countries limit the deduction of automobile expenses. There are several restrictions, but this often applies, ”he noted.
Several directions are suggested
For this reason, the ministry is considering various directions to address this problem.
“The part of the purchase price that does not exceed the established amount of X Cerdocyon. euros. And the difference between the price of a car that is agreed and can be included in the cost and the excess would be the representative cost. Or a percentage is deducted from the purchase price of the car. Another option is to deduct only the purchase price of the luxury cars, ”said R. Bilkštytė.
True, R. Bilkštytė pointed out that there should be an agreement on what a luxury car is.
“There are also additional restrictions on CO2 and similar restrictions on operating and rental costs,” he said.
Lukas Balandis / 15min photo / 15min in the studio – Rūta Bilkštytė
According to R. Bilkštytė, the State Tax Inspectorate (STI) is currently investigating whether taxes are calculated on all cars if they are used for private purposes.
“According to the car number scanning programs, I think it will be possible to register all the cars with the tax office during the summer. And then check if everyone really pays taxes if they use it for private purposes,” he explained.
It is true that it is not yet a bill. The last meeting of the working group is scheduled for October and will present the decisions that it is expected to present to the Government.
R.Kuodis: “tax system”
Raimondas Kuodis, an economist and deputy governor of the Bank of Lithuania, explained that tax breaks cost the state more than is shown. This, he said, is not just a direct waste of budget. In addition to VAT, the GPM rates are higher than we could have. As a result, the country’s competitiveness against Poland suffers.
“It just came to our knowledge then the public sector, which guarantees poor quality education and health care. We have moral justice issues that are difficult to assess, but still exist. The tax system in Lithuania, that great fiasco, has long had to face the challenges of the Constitutional Court or the tax revolutions. Many in the public sector cannot consume through companies because they are prohibited from owning them, paying high rates under standard employment contracts, while others work under subjectively taxable forms, ”he said.
Photo by Sigismund Gedvila / 15min / Raimondas Kuodis
According to R. Kuodis, many problems would be solved by fundamentally revising the number of business forms, reducing them to 3. At the same time, he believes that if it were recognized that non-saving generates investments, many problems would be solved.
“If we leave that system at its current level, we will have serious social consequences, which we still have,” he said.
“Whose gold are the rules”
Mykolas Majauskas, chairman of the Seimas Budget and Finance Committee (BFK), explained that, in his opinion, Lithuania has been guided by the rule over the past decades: “whose gold is, those are the rules.”
“Such a distorted system cannot continue and we are ready for change. If we do not make decisions in time, we can have serious social consequences,” he said.
Photo by Sigismund Gedvila / 15min / Mykolas Majauskas
However, M. Majauskas pointed out that not only laws are important, but also control over their observance. At the same time, he passed to the State Tax Inspectorate, which, according to him, “looked between his fingers for decades.”
“Companies allow themselves to buy goods, to acquire assets that are in no way related to the direct activities of the companies. It can be used for the needs of the owners or managers without due declaration. I urge not only to make changes to the legislation, but also to ensure that the legislation already adopted is strictly enforced, ”he said.
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