[ad_1]
Gitanas Nausėda President. Photo by Vladimir Ivanov (VŽ).
The President proposes a corporate tax credit linked to a salary increase, but also proposes to tax annual income from dividends, capital gains and individual activities above € 35,000 at a higher personal income tax rate of 20% : This year, all such income is taxed at 15%.
A new quote from S.Krepšta has been added
It is also proposed to ensure greater stability of the tax system in line with the 6-month rule of entry into force of tax laws in cases where the tax burden would increase.
President Gitanas Nausėda presented these proposals on Thursday for further discussion by a group of experts convened by the Ministry of Finance. After several meetings in February and March, the group will decide which ones should be submitted to the Seimas for consideration.
Three suggestions
The idea raised by the President on the reform of the Corporate Tax Law provides that those companies whose payroll expenses increase at least 8% per year with respect to the previous period may deduct incremental costs from the payroll fund three times instead of the current one. One. Income tax payable.
“For those companies where wages would increase by more than 8%, the increase in wages could be deducted from costs by multiplying it by three, thereby reducing corporate tax,” Simon Krėpšta, the president’s chief adviser, told reporters.
According to S. Krėpšta, such a benefit would make it possible to increase employment faster after the end of the coronavirus crisis: although the decline of the Lithuanian economy in the European Union was one of the smallest, the unemployment rate is currently one of the most big.
“Registered unemployment reaches 16.4%, statistical unemployment reaches 9%. This shows that certain proactive measures must be taken, and one proposal is a new tax incentive to quickly increase wages or hire new employees, ”explained S. Krėpšta.
This would reduce the income tax payable for companies that increase wages more quickly or employ more staff. This is important because in Lithuania around 60% of all corporate income tax is paid by small and medium-sized enterprises.
The incentive is not intended to cover high income, for which social security contributions are no longer paid, and is valid for five years. Safeguards are also provided for risk management.
[infogram id=”e7a2be01-cedc-4bb7-9210-164a1776b962″ prefix=”5HX” format=”interactive” title=”Pasiūlymas dėl pelno mokesčio”]It is also proposed to approximate the tax rates applicable to personal income from capital gains, dividends and high taxable income from individual activities, applying only to the part of income greater than 35,000 euros of annual net income, at the personal income tax rate applicable to employment (20 %).
This would reduce tax injustice when income tax rates do not depend on the amount of income but on the form of activity.
“Lithuania has already matured once and for all to eliminate injustice in the tax system, which arises from disproportionate amounts of tax clauses and benefits that benefit small groups of people,” G. Naus Asda is quoted in the report.
[infogram id=”85089d5b-4692-499c-8d78-fedb2f0118a8″ prefix=”I2O” format=”interactive” title=”Siūlo sprendimo vizualizacija”]The president also proposes to abandon the existing formal clause, which allows an urgent tax increase, together with the approval of the budget, without meeting the 6-month deadline to adjust to the tax change. It is true that the reduction of the tax burden could continue to be accompanied by the consideration of the budget.
[infogram id=”623ac516-d2cd-4449-969c-b87cec4cd7a0″ prefix=”GkZ” format=”interactive” title=”Priimti mokesčių pakeitimai 2009-2019 m.”]
The goal is to increase budget revenue and prosperity.
It is noted that the proposals aim to improve the tax system in three areas: creating incentives to accelerate unemployment and wage growth in the post-crisis period, reducing unfair tax exemptions that have existed for many years due to different Income tax rates on employment and other income and increase in the tax system.
According to economic data from the EU countries, countries with a higher share of wages in the structure of the economy achieve a greater redistribution of GDP. Therefore, the corporate tax incentive would be an investment in a higher tax / GDP ratio in Lithuania in the medium term, in order to go from the current level of around 30% of GDP to 35% of GDP and create a sustainable opportunity. to provide better public services to the population of the country.
[infogram id=”5a97f36e-ef68-44c0-96a8-239b406f92b8″ prefix=”W0M” format=”interactive” title=”Skirtumas tarp atlyginimų ir BVP / 1 gyv. lygių”]
Write a comment
[ad_2]
