Lithuania failed to provide serious reasons for why it needs a deadline extension for passing tax reforms that are part of the country’s recovery and resilience plan (RRF), representatives of the European Commission say.
“According to the RRF regulation, in order to modify the existing indicators, it must be impossible to achieve them and that impossibility must be due to objective reasons,” Marius Vaščega, head of the European Commission Representation in Lithuania, told reporters on Thursday, commenting on the EC decision to reject Lithuania’s request for a delay until the start of 2025.
“We do not see any RRF conditions to have been met, which would allow somehow postponing the implementation of the RRF indicators,” he added.
Lithuania’s European Commissioner Virginijus Sinkevičius also says that Vilnius failed to provide any substantiated arguments when requesting an adjustment of the RRF plan’s tax reform-related deadlines.
“If we look at the RRF rules, an alternative needs to be presented or proposed to match the measure. The government has not done so. It aims for a fairer tax system and a more efficient public sector but failed to explain the objective reasons that prevent doing that. The government did not even really elaborate on those reasons,” the EC commissioner for environment, oceans and fisheries told BNS on Thursday.
“The Commission refuses to postpone the tax reform for two years without any explanation as to why this should be done. [...] This would have required either proposing an alternative that would meet the objectives set out in the government’s plan (...) or explaining what objective reasons prevent it from doing so,” he added.
The commissioner noted that the Commission had so far granted all requests from member states to adjust their commitments under the RRF plan, making Lithuania the first EU country to have its request refused.
For his part, Mindaugas Lingė, chair of the parliamentary Committee on Budget and Finance, told BNS earlier this week the government had not proposed to the Commission to adjust the reform objectives, and only asked for flexibility on the deadlines of their implementation.
According to Vaščega, the Commission has not made any calculations on how much of the RRF funds Lithuania could lose if the targets set for receiving them are not met in time.
“In the overall context, Lithuania’s use of RRF funds looks quite good,” he said.
On Tuesday, the Commission approved Lithuania’s modified RRF plan worth 3.85 billion euros. However, it rejected the country’s request to adjust the deadlines for the implementation of tax changes.
According to the Commission, Lithuania now has one month to provide additional comment on the matter, and then the EC will make the final decision.
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