[ad_1]
According to the Presidency, from 2010. to 2019, together with the budget, around 80 amendments to the tax laws were approved, of which 30 were aimed at reducing taxation and 50 at increasing taxation. The presidency notes that this is partly due to the fact that fiscal changes are often accompanied by the adoption of a budget and often lack the time to prepare for them, both for the government and for the population.
For this reason, G. Nausėda proposes to increase the predictability of tax laws, leaving an interval of 150 days between the approval of the law and its entry into force. According to the representatives of the presidency, this would allow a better discussion of such taxes, and companies and citizens, to prepare for them.
A message for companies: pay a higher salary, pay less taxes
One of the president’s key proposals is a corporate tax incentive for higher wages and more employment.
According to the president, income tax exemptions apply to many areas, but not to human capital.
The idea raised by the President on the reform of the Corporate Tax Law provides that those companies whose salary fund expenses increase at least 8% per year with respect to the previous period could deduct salary fund expenses three times instead of the current one when calculating the income tax to be paid. This would reduce the income tax payable for companies that increase wages more quickly or employ more staff.
The qualification criterion is 8%. The growth of the wage fund, in the opinion of G. Nausėda’s team, would allow wages to converge towards the Western standard.
“It just came to our attention then. In Lithuania we have 100,000 companies, some of which operate profitably,” said adviser to the president Simonas Krėpšta.
Sigismund Gedvila / 15min photo / Money
This measure is proposed for several reasons: unemployment is 16.4%, according to surveys conducted by the Lithuanian Employment and Statistics Service, respectively. and 9 percent. Lithuania’s GDP per capita reaches 80 percent. OECD average, but the average salary is only 60%. Taking into account that the productivity in Lithuania is 80 percent. Based on the OECD average, it can be concluded that wages lag behind other countries disproportionately.
Forecasts for salary growth are not very positive either: they are expected to increase between 4% and 5% over the next three years, although they grew by about 9% before the pandemic. Thus, this will further slow down the pace of Lithuania’s recovery with other countries and may again increase the scale of emigration.
The presidency also provides certain safeguards: to prevent high-paid managers from raising salaries and thus raising the company’s overall average, it is proposed to calculate only those salaries that do not reach the ceiling called “Sodra.”
According to the president, these incentives should be more favorable for small and medium-sized companies, which account for 60 percent. income tax.
In the long term, this is expected to increase the redistribution of GDP from 30% to 35%.
Third tip: high income is taxed at a new rate
The president also has proposals to increase tax justice. To date, people who receive additional income, regardless of their size, pay 15 percent. tariff.
According to the new proposal, more than 35 thousand. income recipients would pay 20%. Personal income tax rate, receiving income from capital gains, dividends and high taxable income from individual activities. In this way, it is expected to reduce the differences in tax rates that currently exist between different types of income.
VIDEO: President G. Nausėda’s Proposals on Tax Changes
“This is an obvious problem of tax injustice in Lithuania, when people who work with an employment contract pay higher taxes than people who receive income with other types of capital. In the opinion of the president, the time has come to eliminate this injustice, “said S. Krėpšta.
[ad_2]
