Lithuania could introduce a temporary defence tax, and it would come from several sources, says Foreign Minister Gabrielius Landsbergis.
“I am convinced that we could consider a temporary general defence tax. It would have an expiration date as a large part of the revenue that is needed for the [defence] budget is of an investment nature, with a clear calendar, after which we could return to some other reality,” Landsbergis told reporters at the Seimas on Thursday.
In his words, such a defence tax could come from several sources, including borrowed funds, a VAT increase, and corporate tax.
Politicians in Lithuania are now discussing additional defence funding to finance plans to create a division within the Armed Forces, to host the German brigade assigned to Lithuania, and to introduce universal conscription.
Lithuania’s defence funding now stands at 2.75 percent of GDP, but the existing bank solidarity levy is set to expire later this year, bringing the regular budget allocations for the defence to 2.52 percent of GDP.
Prime Minister Ingrida Šimonytė said earlier the country would need an additional 0.7 percent of GDP in defence funding by 2030 for the aforementioned projects. Later on, the need for additional allocations would decrease.
Increases in the VAT, corporate tax, and residential income tax are being considered as ways to finance the defence tax.
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