Or maybe we are not able to manage the country on our own?
“The coalition council of the ruling coalition – the Social
Democrats, Democrats and the “Nemunas Dawn” – has almost finally agreed on some
tax reforms on Tuesday, Prime Minister Gintautas Paluckas announced.
He confirmed that a universal real
estate tax will be proposed with some reservations; a one-point higher – 17% –
corporate tax; a 12% VAT relief instead of 9%; as well as three personal income
tax rates, regardless of the source of income, but only on its amount – that
is, 20%, 25% and 32%; a 10% insurance tax and a 5% relief from the insurance
tax.
The coalition has not yet made a decision on a preferential
VAT rate for fruits, vegetables, and organic products.
According to the prime minister, the final figures and rates
will become clear after the Ministry of Finance provides more accurate
calculations.
“We have weighed the coalition’s political will to implement
them (tax changes – BNS) and now we will go talk to social partners, with
public groups and try to present the modeling of certain proposed tax changes
and their impact on both personal finances, business, and individual sectors,”
G. Paluckas told reporters in the Seimas after a coalition council meeting.
As BNS previously wrote, the council intended to consider
proposals for personal income tax (PIT), profit, insurance, real estate (RE)
taxes, and value-added tax (VAT) benefits.
If the Seimas approves, it is planned
to collect about 0.5 billion euros per year from higher taxes, the prime
minister said.
Real estate taxation
When taxing real estate, it is
proposed to apply a rate of 0.1% to property worth up to EUR 200,000, and 0.2%
to the portion from EUR 200,000 to EUR 400,000. Rates of 0.5%, 1% or 2% are
also being considered for expensive property. A 50% lower rate would be applied
to first-time homeowners, socially disadvantaged people, and those officially
renting housing.
It is proposed to tax unused
abandoned real estate at a rate of 4%.
"It has been agreed that as real estate values change
(and they are being recalculated this year), under the current procedure, the
unbearable burden of the real estate tax would not fall on families and those
individuals who currently own property, because if we did nothing, it would
rise quite dramatically. Therefore, the changes that will be made will not
necessarily increase the real estate tax for those who already pay it, but on
the contrary, they will distribute it fairly," explained G. Paluckas.
"I will not comment much on individual moments.
Individual details will be specified in order to show how the application
itself will affect the finances of an individual or family," said the
Prime Minister.
G. Paluckas did not answer the question of whether there
will be different taxation of property in cities and rural areas.
According to BNS, it is also being considered to establish
the lowest real estate tax threshold in euros, up to which residents would not
pay it.
According to G. Paluckas, it will be
proposed to direct half of the income from this tax to the Defense Fund and
municipalities, and later, when the geopolitical situation changes, the
municipality would receive all the income from the real estate tax (and it
would be delivered to the elite’s houses in the form of stolen checks (K.)).
GPM, insurance premiums
In addition,
three GPM rates are proposed – 20% – for income up to 36 annual average salary (according to the average
salary indicator of the third quarter of last year – 80,600 EUR), 25% –
up to 60 average salary (134,300 EUR) and 32% – over
60 average salary. The authorities are no
longer considering an additional 8% rate for income exceeding 120 average salary.
Insurance
premiums are proposed to be taxed at 10%, and some civil liability premiums –
car and home insurance, when purchased with a loan – at a preferential rate of
5%.
According to the Prime Minister, there is a “more or less”
common view on insurance contracts.
“But we need to talk to social partners and the public,
explaining and showing how such a change would affect the premiums paid by
companies and people,” he said.
Democrat Linas Kukuraitis says that the option of exempting
such contracts from tax altogether is still being considered.
Corporate tax, VAT
The ruling party agreed on a 17%
standard and 7% preferential corporate tax. Starting this year, it has been
increased from 15% to 16%, and the preferential tax has been increased from 5%
to 6%.
“There is a common view that a 1% (percentage point – BNS)
increase in corporate corporate tax would certainly not be dramatic,” the Prime
Minister said.
The current 9% VAT relief will be
proposed to be increased to 12%. There is no talk of increasing the 5% relief
for medicines and medical devices.
"One of the preferential (9% VAT – BNS) rates could be
raised a little (...) – a proposal to change the preferential 9% rate to 12% is
currently being formulated," said G. Paluckas.
The 9% VAT rate currently applies to
central heating, firewood, public transport, books and non-periodical
information publications, art and cultural institutions and events, as well as
accommodation services in the tourism sector.
According to the prime minister, there is no decision yet in
the coalition regarding a preferential VAT rate for fruits, vegetables, and
organic products. "In order for this (the preferential tariff – BNS) not
to become an unbearable burden on the budget, we should look at how to ensure
that the Lithuanian consumer is the ultimate beneficiary," he said.
The ruling party has already agreed on the so-called sugar
tax, so they did not discuss it on Tuesday.
The Social Democrats propose
introducing a tax on sweetened beverages - a group of parliamentarians last week
registered a draft law on the tax on sugary beverages - for beverages
containing sugar or other sweeteners, depending on their quantity, it is
proposed to apply tariffs of 10, 25 and 30 cents per liter of beverage."
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