Financial Services, Legislation, Lithuania, Markets and Companies, Taxation

"The most likely scenario is that the reduced rate of 9% will disappear and the main reduced rates will be 15% and 5%," he told the national radio LRT on Tuesday morning.

The prime minister said he also wanted the main VAT tariff to be brought back to 18%, however, noted that the issue would be discussed next year. The current VAT tariff is 21%.

At the beginning of July, the ruling Lithuanian Farmers and Greens Union agreed with the proposal from opposition conservatives to bring back the VAT tariff in exchange for their support to the reform of the forestry sector. The deal did not specify a VAT tariff, however, the conservatives' leader Gabrielius Landsbergis stated it should be 9%.

Finance Minister Vilius Sapoka said in late July that the 9-% VAT rate on heating would be reintroduced temporarily from this fall until the end of the year.

According to information available to BNS, if reduced VAT rates of 5% and 15% are established starting 2018, heating and hotels would be subject to a 15% rate. Until June, VAT on heating was 9% and is now 21%, while hotels enjoy a 9% rate.

Furthermore, there is a proposal to lower 9-% tariff on books and transport services to 5%. Currently, a 5-percent tariff is applied on medication.