Despite considerable economic growth, Lithuania still suffers from one of the biggest income gaps in the European Union and a big share of the population is at risk of poverty, according to the European Commission. EC's recommendations for Lithuania include refocusing taxation and improving its education system.
One of Lithuania's big problems is tax collection, according to the EC. Despite efforts to tackle the black market, the government still needs to improve tax collection and expand the tax base.
According to the EC, Lithuania should make better use of taxes on property and cars which have smaller effect on growth.
Moreover, income gap and poverty require to better calibrate the tax system.
“Despite consistent economic growth, poverty, inequality and social exclusion remain a big problem, especially among senior citizens, the disabled, single-parent families, and the unemployed,” according to Arnoldas Pranckevičius, the head of the European Commission's office in Lithuania. “A better organization of the tax and benefits systems would help address the problem.”
The EC's second recommendation for Lithuania is to improve the quality and effectiveness of its education system, including adult learning. Lithuania should also work on making healthcare more affordable and effective.
“More quality and efficiency is required in all levels of the education and healthcare systems,” according to Pranckevičius.
The EC also recommends that Lithuania direct its public investment towards innovation, improving energy and resource use efficiency, sustainable transportation and energy links.
Pranckevičius notes that Lithuania should also take into account regional differences when pursuing economic policies.
The EC also notes that Lithuania's economic growth is not inclusive and leaves large parts of the society behind, especially elderly citizens, the disabled, single-parent families and the unemployed. Social inequality is one of the biggest in the EU.
Lithuania's demographic situation is also a concern, according to the EC. Aging population requires more focus on quality education to supply enough skills for the country's economic needs.