A defence tax could be introduced in Lithuania in 2025, President Gitanas Nausėda has said.
“Yes, we can talk about 2025 [for introducing the defence tax], but first we have to make use of the opportunities offered by borrowing,” he told BNS in Tallinn on Monday.
According to the president, there is also a need to agree, first of all, whether such a tax is needed.
The idea of the defence tax was raised by Laurynas Kasčiūnas, the chair of the Seimas Committee on National Security and Defence, after the President’s Office criticised the 2024 defence budget for not including funds for the plan approved by the State Defence Council to establish a land division within the Lithuanian Armed Forces.
Kasčiūnas vowed to start pooling political parties’ support to agree on such a tax, which could come into force in 2025.
“I’m ready to start discussions throughout 2024, to participate in discussions on the possible defence tax format, but it is too early to talk about it today,” Nausėda said.
He earlier said he would not back a VAT hike to increase defence funding unless a VAT rebate on food or other essential goods was introduced too.
Next year’s budget will allocate 2.71 percent of GDP to defence, with 2.52 percent coming from the regular budget appropriations and the rest from the existing temporary bank solidarity levy that will be used to only finance infrastructure to host allied forces.
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