Lithuania is the most expensive country in Europe for the average person

“The ruling Lithuanians boast about the tax reform. However, in essence, it does not change anything. Lithuania was and remains the most expensive country in the European Union for mere mortals – it is easy to earn money here only for those with very large salaries, writes madeinvilnius.lt.

 

A thousand euros “in hand” is not such a big salary. However, the state taxes on this amount will be 470 euros. There are no such taxes in other EU countries. After the tax reform, taxes will “significantly” decrease – 420 euros, but Lithuania will still remain the most expensive.

 

Only neighbors Latvia and Poland are closer to Lithuania in terms of taxes, where taxes are 400 and 380 euros, respectively, if the salary is 1000 euros “in hand”. In other countries, taxes are much lower. For example, in Germany, taxes on such an amount are only 200 euros, in the UK - 50 pounds sterling. In the UK, the attitude towards those who earn little is simple - it is better to earn little and not pay taxes at all, than not work and ask for benefits. Therefore, if a person's salary is less than 1000 pounds, he does not pay taxes at all, and the employer pays 87.45 pounds of social insurance.

 

If we take only income tax and Sodra taxes, then Lithuania is the most expensive country in the EU, you have to give the state 32.3% of taxes. From next year - 31.7%. The most expensive will be Italy with a tax of 32%! But we will remain in second place.

 

The average take-home salary in Lithuania is now about 1320 euros. From such a salary, taxes are 850 euros (after the reform it will be 780 euros).

 

If your monthly salary is 10,000 euros in take-home pay, congratulations. You are not only one of 6,000 people with such a salary in the country, but also one of those who pay the least taxes by European standards.

 

To receive 10,000 euros in take-home pay, you have to pay 7,000 euros in taxes in Lithuania. This is one of the lowest rates in the EU. Most countries have progressive taxes, where the more you earn, the less you receive in take-home pay.

 

With a salary of about 3,000 euros in take-home pay, Lithuania becomes competitive in the EU and takes the lead.

 

The Lithuanian tax reform will affect the middle class, people earning from 2,000 to 3,500 euros. Others will hardly feel the changes.

 

"The new reform in Lithuania may increase the progressivity of taxes, but the difference will be small, the overall tax environment will not change. Budget revenues will increase by about 200 million euros, but this will not change Lithuania's image as a country with high taxes, and the additional revenues will not plug the holes in the budget," said Sigitas Živoltas, a tax adviser at the Swiss company Pillar Capital.

 

According to him, people will continue to gradually leave Lithuania, and the worst thing is that the essentially meaningless reforms do a disservice to the country's image - they do not help attract international companies and do not increase competitiveness - the tax system is reformed too often in Lithuania."