"If you show me a Lithuanian who has not noticed a rise in
prices, you can tell me something bad. I write "did not notice",
because when it is difficult to pass a Bentley, which was bought from the
income of various projects, in the center of Vilnius, you realize that not
everyone felt the price when bread and sausages became more expensive.
All the more so as we need to put together how we will live
in the near future. The government meeting decided on amendments to the revised
draft budget for 2022. Following its renewal, it is planned to allocate
additional funds to mitigate the effects of inflation, provide assistance to corruption refugees and allocate funds to our country's security-related
infrastructure.
Sounds nice. It is also good that this time there are no
mystical "income will increase by reducing the shadow", and
everything is much simpler and clearer. The desire to try to cushion inflation
and protect the purchasing power of the most vulnerable is also good. This will
still need to be done when bread is expected to double in price in the autumn
and a kilo of better pork costs more than € 10. Another nuance is that some
remedies that are a classic of the state’s anti-crisis actions can become salt
on the wound if used improperly. For example, huge infrastructure projects such
as energy connections.
Revenue from value added tax (VAT) is increased by EUR 440.9
million. EUR 172.3 million in income tax, personal income tax - EUR 119.7 mln.
Revenues from the sale of tangible and intangible assets are increased by EUR
52.8 million. euros.
Translated into vernacular, the higher the prices, the more
revenue is collected in the budget, as the main part of it is VAT.
However, this is not good news for citizens, as their
purchasing power will not increase. You will have to pierce extra holes in the
belts.
Certain sectors may find it harder to raise wages for their
employees this year, employers say. As businesses face difficulties in finding
new markets and rising energy prices, this increases costs to corporate
budgets, which, according to economists, will not rise as fast this year. They
are projected to increase by 3-5%.
However, the leader of the trade unions, Inga Ruzgienė, said
that already today about 21 percent. people in Lithuania live below the poverty
line and find it difficult to pay their bills.
I remind you that inflation is already 14%. and it is only
increasing.
Real estate developers say in an informal conversation that while
March was a "dead" month, the beginning of April is a reminiscent of
a buying boom: people working in troubled sectors are in a hurry to borrow and
buy a home because no one knows what's next. On the other hand, plots have
disappeared from trade. Their owners are just waiting.
A total of EUR 973 million is planned to be used to mitigate
the effects of inflation. EUR 370 million is proposed for humanitarian aid to
Ukrainians fleeing the corruption. It is planned to allocate 72 million
euros to finance railway electrification projects. EUR 83 million to support
other railway infrastructure.
In total, the Government's plan to increase people's income
provides for 315.3 million. euros. This is less than the state will receive
additional VAT from rising prices.
Among the proposals are an increase in the amount of
non-taxable income (NPD) by 80 euros, an increase in old-age pensions by 5%.
and other. This will require more than $ 2 billion. euros.
As always, there have been votes to make tax changes. Voices
- from the opposition.
Vilija Blinkevičiūtė, the chairwoman of the Lithuanian
Social Democratic Party, calls on the government to consider the value-added
tax (VAT) relief for basic foodstuffs during the government's amendments to the
budget on anti-inflationary measures on Wednesday.
According to a press release from the Social Democrats
(LSDP), only 3 out of 27 European Union (EU) countries, according to V.
Blinkevičiūtė, do not apply tax benefits to food, namely Estonia, Denmark and
Lithuania. "Food prices reached unprecedented highs in April. Food prices
are projected to continue to rise. Therefore, what the rulers offer will not be
enough. Therefore, we call for the budget amendments proposed by the government
on anti-inflation measures to be supplemented by 9% VAT relief for basic
foodstuffs. "
Going back to the budget, all is well. More precisely, even
good enough, but again there is no answer to some questions. For example, when
will the reform of education and public administration finally take place? How
long will we allow ourselves the luxury of burning billions simply because the
rector of one institution or another has friends - influential politicians?
And so far there is no answer to how the economic war with
China affected us. What to do for business and what support will be and what support will
be effective?
I remember a recent correspondence with one ministry. This
is not folklore, but real conversation.
- How will the state of the sector change and what
challenges await? Maybe you can provide at least a
preliminary analysis and estimate what the losses might be?
- No. We do not have the resources to do so.
- However, your ministry has a separate Analysis Department
with a dozen people.
- Yes, but they only collect statistics and fill in tables,
but do not analyze.
- However, the tables are filled in and the same statistics
are collected by at least three institutions under your authority, maybe
someone can provide some analysis?
- No. Ask associations.
We stray between numbers and do not see the whole. We see no
possibility that, if someone shows them, the bureaucracy will spin so slowly
that they will simply disappear.
If we go back to the huge appropriations for energy projects
and the army, there is no answer as to who will receive this money. If it will
be Lithuanian business (let's miss a part about the fact that everyone in the
EU is equal and can participate in competitions on equal terms. Poles have
heard that too, but they get out differently), great. This can be a great
incentive for individual sectors. If not, we will support somebody else.
To put it simply, there will now be a fight between whether
the ammunition for the army will be produced at a factory in Giraitė or at a
factory near Prague. Who will build military camps and make tents. Not all jobs
and processes require retrained personnel and capabilities. Here are just the
decisions of politicians. The business may be involved, but it will not really
decide what will happen and how.
When it comes to cutting prices, it is not just about
cutting taxes.
Karolis Šimas, General Manager of Agrokoncerno Gūdai, notes
that when it comes to export opportunities and capacity, it is necessary to
assess the grain pricing that is changing the situation. "Even the current
minimum movement of Ukrainian corn from the old harvest is starting to change
prices. Recent days have shown that test batches of cheaper corn are reducing
the attractiveness of Lithuanian feed wheat.
It can be assumed that the
intensification of these flows could cause additional problems for farmers - if
farmers do not fertilize enough this spring, the harvest will not grow to the
quality of food grains and will be in direct competition with Ukrainian corn,
feed wheat or barley and other crops grown in Ukraine.
This may be
good news for the Lithuanian livestock sector, but a Lithuanian farmer should
try not to face such direct competition, so he must make every effort to grow
the usual higher quality wheat for us. ”
Simply put, we can import cheap grain from Ukraine and
export expensive ones. No one knows how this will work. However, this could put to use the transport sector, which has lost some of its freight to the
East. Is it worth it or is it worth it? Maybe transporters can be supported and
food prices will fall? We will win in several sectors at once. No one counted."
Dream of elephants. And where to get cheap fertilizer? You gave up on Russians and Belarusians. Now it remains to compete only with poor quality of Ukrainian feed.
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