On Thursday, Lithuanian President Gitanas Nausėda proposed raising the non-taxable income threshold to 510 euros, from the current 460 euros, in an attempt to help people cope with high inflation. He has also called for one-off payouts to the most vulnerable.
“This is a measure aimed at people with the lowest incomes. It is a targeted and purposeful measure,” the president said at a press conference.
In the 2022 budget, Lithuania raised the non-taxable income threshold to 460 euros, from the previous 400 euros.
According to the president, this is “not enough” because the decision was made “at a time when the inflation problem did not yet exist or had just started to emerge”.
Nausėda also suggested providing one-off payments of 100 euros to some of the most vulnerable groups, including pensioners, large families, and those struggling to make ends meet.
“It is appropriate to consider one-off payments to the most vulnerable social groups. I’m talking about the recipients of old-age and social assistance pensions,” the president said.
“We are also speaking about large families, families raising children with disabilities, and, of course, families experiencing financial problems,” he added.
The Lithuanian parliament will be asked to debate the proposed measures at a special session in February, the president said.
According to Nausėda, his proposed measures might cost around 150-200 million euros that would be collected into the state budget because of the rising inflation.
This week, the government also proposed to temporarily cut the value added tax (VAT) on central heating to zero, as well as provide additional incentives for residential solar power plants, to mitigate soaring energy prices.
Read more: Lithuanian government proposes zero tax on heating to cushion price hikes
In the words of Nausėda, these measures are “very modest” and “are not solving the inflation problem”.
But according to Finance Minister Gintarė Skaistė, the measures are sufficient to mitigate the impact of rising prices.
“We believe those measures are sufficient. We are monitoring the situation, and if we see over the course of this year that the energy market is not stabilising, we could probably introduce additional measures as well,” she said.
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