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Friday, 29.03.2024, 12:30
Lithuanian economists, trade unions cautiously welcome tax reform plans
Zygimantas Mauricas, chief economist at Luminor, one of Lithuania's biggest banks, says that
the proposed tax reform will not bring about radical changes to the state.
"The goal is to reduce emigration and the net pay gap between
Lithuania and Western Europe. In this respect, a step in the right direction
has been made, but it is not sufficient to drastically reduce emigrant
flows," he told BNS.
Arturas Cerniauskas, chairman of the Lithuanian Confederation of Trade Unions, says that the
reform should benefit employees.
"If all goes as envisaged in the reform, then it should be quite
good," he told BNS.
Mauricas thinks that the proposed consolidation of the employee and
employer taxes will be good for the tax system.
"It was far from certain that the government was determined enough to
do so. This is a positive step, because it can potentially curtail the shadow
(economy) and make the system more transparent. It will have long-term positive
effects," he said.
Cerniauskas notes, however, that the reform will help Lithuania improve its
statistics, but will do little to actually improve people's lives.
"This reform has great significance as far as the state's image is
concerned. We are in the last but one position in terms of minimum wages now,
but once we change the way we calculate wages, we'll rise several positions
both in terms of minimum and average pay," the trade union leader
said.
"Statistically, it will look as though we live better, but in
practical terms, we remain where we are now," he added.
As part of its plan to streamline the tax system over a period of three
years, the government proposes to increase the tax-exempt personal income
threshold, to reduce social insurance contribution rates and to introduce a
ceiling on payments to the state social insurance fund Sodra.