Lithuania is set to sign a technical assistance agreement with the International Monetary Fund (IMF) aimed at reducing the country's value-added tax (VAT) gap, Finance Minister Rimantas Šadžius said on Thursday.
"We're in serious talks with IMF experts, we'll sign a technical assistance agreement. They'll analyse what we have here in Lithuania and propose measures that have proven effective in other countries, including Poland," Šadžius said in the parliament.
The IMF would advise Lithuania on how to better tackle the shadow economy, narrow the VAT gap and improve tax administration.
Šadžius told BNS after the parliamentary meeting that the VAT gap is costing the state budget hundreds of millions of euros every year.
The minister believes the IMF's support will be effective, noting that the institution has already helped a number of other countries deal with similar issues.
He expects the agreement to be signed in the near future.
The minister also pointed out that the European Commission reviewed the government's initial tax reform package, which included a different version of the real estate tax.
"The package was found acceptable [by Brussels], but the real estate tax proposal was different," he said.
At the time, the government proposed taxing not only second and additional properties but also people's primary homes, setting a non-taxable property value threshold.
However, the ruling coalition later agreed not to tax primary homes, a move backed this week by the parliamentary Committee on Budget and Finance.
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