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2019.11.06 14:00

Businesses hit back against Lithuanian parliament's tax proposals

Vytautas Budzinauskas, BNS2019.11.06 14:00

Lithuania's biggest business organisations say politicians are violating the national agreement signed two years ago when proposing tax raises.

In a statement circulated on Wednesday, they say they will closely watch the passing of next year's budget and decide if it is worth sticking to the agreement.

Lithuania's ruling parties have proposed introducing taxes on bank assets and turnover of big retail chains.

Robertas Dargis, the president of the Lithuanian Confederation of Industrialists, says new taxes should not be introduced hastily and without in-depth consideration.

“What the business sector is mainly concerned about is that there are plans to change the laws again, although it has been less than a year since tax reforms. […] Are agreements signed by social partners valid in this country? Is it morally appropriate to increase taxes for the working population and businesses when the way the tax money is spent is not properly supervised?” Dargis told a press conference on Wednesday.

Lawyer Rolandas Valiūnas, the board chairman of the Investors' Forum, has noted that failure to stick to agreements “leads to distrust”, adding that he hopes none of the organisations will withdraw from the national agreement.

Valdas Sutkus, president of the Lithuanian Business Confederation, says the existing agreement works, but is threatened.

“Damage might be done to the social dialogue,” Sutkus said.

Danas Arlauskas, the managing director of the Lithuanian Confederation of Employers, says the government budget may decide the fate of the national agreement and whether businesses will continue to cooperate with the government. In his words, business organisations have already discussed a possibility to withdraw from the agreement.

The business representatives argue that the proposed tax changes are undermining the expectations held by businesses and the working population of a stable tax system and the reduction of tax burden for labour income, and are also reducing Lithuania's attractiveness among new investors.

The ruling parties in Lithuania are proposing taxing assets of commercial banks and turnovers f major retailers.

Read more: Lithuanian president weighs in on tax debates