2020.04.24 07:00

No new taxes, but government spending may be adjusted – Lithuanian PM

Jonas Deveikis, 2020.04.24 07:00

The Lithuanian government is not planning to introduce any new taxes to make up for shortfalls in state coffers, but may have to adjust this year's spending plans, Prime Minister Saulius Skvernelis said on Thursday.

“Naturally, we may have to come to the parliament with corrections to this year's budget. If it comes to that, we will be ready,” he told the parliament during the Government Hour on Thursday when MPs could question ministers.

Read more: Lithuania's tax collection 15 percent below target in March

He also assured that no new levies would be introduced to shore up state coffers. Instead, the government would make up for the shortfall with borrowed funds.

The Lithuanian parliament has recently raised the government's net borrowing limit for 2020 to 5.4 billion euros, from 904.6 million euros,

“We have no plans to introduce any additional taxes,” Skvernelis said.

Read more: Lithuania borrows €1.5bn to stimulate economy

The State Tax Inspectorate has reported that tax collection in March fell 100 million euros below target. “Certainly, as the economy stagnates, we have some losses,” Skvernelis said.

“However, let's not forget that these losses are also due tax holidays,” he added, referring to the tax authority's decision to allow struggling businesses to put off paying taxes and social insurance contributions.

Asked by the opposition about next year's government budget, Skvernelis said that speculating what it would be was difficult.

The term of Skvernelis' cabinet expires after a general election this October. While the government will start drafting the 2021 state budget bill in June–July, it will be up to the next parliament to pass it.