The Lithuanian parliament has voted down a proposal by a group of lawmakers to reduce VAT for new electric cars.
The group had proposed to cut VAT rate for new electric cars worth over 35,000 euros to 9 percent. However, only 42 MPs voted for clearing the bill for debate, eight were against, and 40 abstained.
Petras Cimbaras, representing the Social Democratic Labour Party of Lithuania and the person behind the initiative, said it would help Lithuania to meet its EU commitments on climate change control.
Meanwhile, Aurimas Gaidžiūnas of the Lithuanian Farmers and Greens Union believes the VAT cuts would only benefit electric car sellers.
Mykolas Majauskas, a member of the conservative Homeland Union – Lithuanian Christian Democrats and a member of the Committee on Budget and Finance, said such a tax reduction would be aimed at rich people. “The reduction would be meant for those who are the highest-earners and are capable of buying a more expensive and luxurious car,” he said.
The proposed VAT reduction would cost the state budget around 840,000 euros per year.