[ad_1]
The coronavirus crisis, with the increase in public debt, may require some tax increases in the future, but a change in the structure of the economy would not impose such a burden on the population or the country’s economy, the finance minister said. .
“Will it be necessary to raise taxes? Well of course there could be more real politicians here to answer, who are voting and how we will do it. If this is the case in a rational and pragmatic way, I think so: if the structure of the economy changes to a higher value added, the adoption of higher taxes will not be so painful for society and it will not stop the economy, ”said Vilius Šapoka at the Lithuanian Economic Conference organized by Valstybė magazine.
On the other hand, he said, without changing the structure of a country’s economy, without investing in changing the DNA of the economy, but simply increasing taxes, a country can be programmed for long-term stagnation.
“Great examples are the southern countries of the European Union: huge debts, huge taxes, because those debts need to be paid. I hope that Lithuania does not change direction. And there is scope to raise taxes even now. Those that are not so detrimental to economic growth are, firstly, property taxes and ecology-related taxes, ”said V. Šapoka.
According to him, a temporary deviation from the optimal level of indebtedness is justified, but it is necessary to act responsibly.
“If we start creating wealth from borrowed funds even now that fiscal discipline has relaxed, if we suddenly start increasing wages, pensions, and other social benefits far beyond the indexing formula, then of course, there are already some The simple math, even if it is not high, will work, the debt exponent will turn on, because investor confidence in our debt will change suddenly and, in that case, the cost of debt will start to grow rapidly, “he explained the Minister of Finance.
V. Šapoka declared in the summer that the state budget expenditures for consumption in 2021 should not be increased, and it is not planned to increase taxes, except possibly environmental ones. The minister warned that it is necessary to think about the country’s growing debt so that it does not exceed the Maastricht criterion.
He then told BNS that public debt should reach almost 50 percent by the end of this year. GDP, and the Maastricht criterion does not exceed 60%.
Following the introduction of the quarantine in March, the Seimas increased the government’s net borrowing limit from 900 million. up to 5.4 billion. to allow the government to compensate for declining revenues and reduce the impact of the crisis on the economy.
[ad_2]
