The president’s fiscal dreams – Business inios

In presenting the proposals in the field of taxation, the President says that the first objective is to provide an incentive for the post-pandemic period, a salary for faster growth and employment, and a tax incentive for companies that increase the wage bill in more than 8% annually. Another goal is to increase the fairness and misrepresentation of the learning system. To this end, the president proposed to set a higher GPM rate for individual activities at 20% for the part of the revenue that reaches 35,000 euros. Dividends, capital gains and other irregular income are also taxed at a 20% rate. To increase the stability of the tax system, it is proposed to abandon the possibility of raising taxes along with the budget.

Mykolas Majauskas, president of the Budget and Finance Commission of Seimas, doubts the benefits of the new benefit, according to him, the small business receives so much benefit.

As a result, he is even more cautious about corporate tax breaks, he says.

Business and industry representatives who spoke about the president’s desire to introduce corporate tax breaks, tied to the salary climate, called it innovative and worthy of consideration, but also supported relief for reinvested earnings. Such a corporate tax system is in force in Estonia and Latvia, and from year i onwards also in Poland.

0% corporate tax rate on reinvested earnings, encouraging companies to invest in more modern production technologies, thereby increasing the technological readiness of companies, increasing the ability of companies to produce high and medium high-tech products By increasing competitiveness and the ability to integrate into the EU strategic value chains, attract more foreign direct investment, conditions for investors are much better, pays Vidmantas Januleviius, president of the Lithuanian Industrial Confederation (LPK).

LPK proposes to change some of the current tax benefits. For example, instead of the GPM refund for the purchase of housing, auto repair and childcare services, the idea of ​​a refund of part of the value added tax is being considered, since the tax administration is simpler and efficient, a practice that exists. In foreign countries.

The private sector does not understand the need to increase taxes on capital, so the employment rate should be reduced from 20 to 15% PIT.

However, the animal problem can be solved in two ways by raising taxes as chairman of the silo or by changing taxes for employees. The second option would be more acceptable to both society and businesses, but a detailed analysis of benefits and benefits is needed to determine the most appropriate solutions to the problem, believes V. Januleviius.

The experts also do not spare criticism of the president’s statements and underline that they oppose the government’s program: it is worrying that they may increase incentives for life activities and harm Lithuania’s competitiveness.

Elena Leontjeva, president of the Lithuanian Free Market Institute (LFMI), reminds us that dividends and capital gains are taxed more in Lithuania than in neighboring countries.

The effective tax rate on dividends is 27.75%. Comparing taxes on capital with other income is not entirely reasonable, since the shareholders bear the risk and they are not guaranteed to make a profit. And because shareholders take possession, in bankruptcy, they can lose all assets invested in the shares. If the mon suffers a loss, no one will compensate her or her shareholders, she plans.

According to the expert, the offer of benefits to those who will increase wages contradicts the government’s path to abolish benefits and goes a little beyond economic logic. First, companies need to invest and increase labor productivity in turn and wage growth. After all, every Mons manager is interested in raising salaries and does so because he wants to retain and encourage his employees.

However, if you start doing this for relief, I fear it may lead to a difficult financial situation. Bureaucratic facilitation procedures can only further complicate and increase the cost of tax administration, warns the LFMI president.

Suspicions about individual activity are also questionable. First, it should be noted that self-employment is different from paid employment in economic terms. Unlike employees, freelancers take risks and assume responsibility for the organization of their business, their income is not guaranteed, not recurring. The compensation of the job is not directly related to the profit or loss of the company.

Not a single government was fighting for its goal on the flag. No matter how ambitious the projected numbers were, it’s no secret that the increase in the elix cap has become a catalyst for any rate hikes. Market analysts point out that for the self-employed to declare higher income, taxes must be regressive.

M. Majauskas V believes that the Government has the greatest responsibility in the implementation of financial and educational policy. It is true that the President, with the right of legislative initiative, can certainly offer proposals on these issues. That’s what he does.

So much so that it is necessary to carefully coordinate positions, find compromises and consensus with the Seimas, the Government and the Ministry of Finance when presenting proposals on issues, because these are very sensitive issues that affect a large part of society, said the politician . .

Mr. Nausda will present at least some proposals on a specific tax rate or payment procedure within a year and a half, when he is in office as President. But almost one proposal has not yet been approved by the Seimas, since they have been evaluated with caution by both the previous government and the supplied one.

V does not question the president’s view that the tax system should be fairer, which is really important. However, this justice requires an in-depth debate and, according to the politician, must involve all victims.

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