Lithuania’s government on Wednesday approved a draft tax reform package after discussing it for the first time, and it will be put before the country’s parliament next week.
Prime Minister Ingrida Šimonytė hopes in-depth discussions will take place over the summer and concrete proposals could be discussed in the autumn. The package is aimed at making the tax system fairer, she said.
“Since we now have a whole series of incentives, investment incentives, we see the need to extend them as the fiscal effect is clearly what it is. The goal is to make adjustments within the system itself to make it more reasonable to talk about it as a fairer system,” the prime minister added.
The bill was amended on Wednesday under the Finance Ministry’s proposal. The changes increased the income threshold over which the additional income tax rate would kick in, changed the way the corporate tax for small companies is calculated, and also raised the threshold for property tax on residential real estate.
The Finance Ministry presented the initial version of the tax reform package in March and it was later adjusted.
Finance Minister Gintarė Skaistė said in the middle of May that if the government-proposed tax reform got stuck, Brussels would suspend payouts to Lithuania under the EU RRF plan, and the amount of unpaid funds would be much higher than the 26 million euros currently withheld.
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