The Government has prepared a plan for tax reconstruction which was already presented to both the Peasant and Green Union and the social democrats on Wednesday, and will be presented to the public on Friday. However, even now some of the plans details have angered several peasants.
DELFI has received the plan for tax reconstruction which provides general details regarding how the fight against poverty will be conducted and how entrepreneurship will be promoted.
Money for children will be paid but the people will only win from 11 to 108 Euros
Although, the plan foresees to increase non-taxable income (PVM) from 310 to 380 euros, which means that the lower-income citizens will pay the least amount in taxes.
At the same time, the additional non-taxable income tax (PNDP) will be removed, which this year reaches 200 euros for one child. Thus, child money (also known as baby money) will be paid instead of the PNDP.
PNPD means that parents earning more than the minimal wage utilized even bigger tax breaks, but those that were earning the minimum wage and below it did not receive the same benefits. Thus, by removing the PNDP the issued governments support for children will no longer depend on the level of income.
Child money that was allocated both to the unemployed and the businessman with children will reach up to 30 euros for the first and second child, and 75 euros for any other child after that.
The table provided by the ruling party illustrated that families earning the minimum wage or an average salary will see an improvement to their situation from the amount beginning from 11 euros to 108 euros.
Families where both spouses are earning under 380 euros and/or growing three children would receive 308 euros.
However, if both spouses are earning an average salary and also have three children they would receive only about 21 euros.
The plans regarding the merging of the contributions of the employer and employ to "Sodra" are being dropped
According to, to politicians that attended the meeting the Minister of Finance Vilius Šapoka clearly stated that the Government refuses to merge the contributions paid to "Sodra" by both the employer and employee together.
At the moment, workers working under contract in the work place position is taxes thusly: 15 pct. goes to income tax, 6 pct. goes to health insurance, 3 pct. goes to pension and social insurance and 31.18 pct. is paid by the employer to "Sodra". Thus, in summary the taxes based on the place of work usually consist of 42 pct.
Furthermore, Prime Minister Saulius Skvernelis publicly stated that the intention to move the 31.18 pct. from the employer to the employee, thus automatically increasing the wages "on paper" which would encourage people to avoid working in the "shadow".
However, now it appears that this plan of the program is to be removed even though it was an important part of the election program of the Peasant and Green Union.
"The argument of the Finance Minister was the only one: this is not something any elsewhere" – stated one of the peasant representatives.
According to, DELFI sources this was not received well by the chairman of the Parliamentary Budget and Finance Committee Stasys Jakeliūnas but the afore mentioned politician declined to comment.
Will the employers will benefit from the loosening of contributions to "Sodra"?
Another important point – is the size of the minimum monthly wage (MMA) social insurance contribution sealing, which means that all social security contributions should be pain from the MMA, and even by those that work only part-time. Thus, this would increase the tax on those working only part-time.
The ruling party is also planning to introduce a non-taxable amount of 100 euros for the contributions to "Sodra" by low-wage workers. Which means that a person earning 380 euros would pay contributions to "Sodra" from the amount of 280 euros.
However, it would seem that this has once again incurred the anger of S. Jakeliūnas in regards to the merge between the contributions made by the employer and employee. At the same time, the "freeing" of 100 euros from the contributions to "Sodra" for low-wage workers will lead to more gains incurred on the side of the employer.
"S. Jakeliūnas stated what are you doing here: you promised to help the middle class, to fix the lives of the poor, but what are you doing here? Please, do your calculations, if from 100 euros a person pays 3 euros, and the employer 30 euros. Then, removing the first 100 euros from contributions paid to "Sodra" and the sick funds, you give 3 euros to the employee and 30 euros to the employer. To this, the vice-minister who spoke for the Prime Minister (which looked quite interesting) stated: the employers will share the 30 euros with the employees, they will surely not keep the 30 euros for themselves but rather use to increase their wages. And, then half of the fraction started to murmur" – stated the representative of the Peasant and Green Union.
"I found it quite strange and interesting, that the person playing first is not the Prime Minister but the vice-minister. She spoke quite a lot, in regards to the status in would have seemed that she was the first deputy of Ramūnas Karbauskis" – stated the interlocutor.
Income tax according to profit
For free type of professions such as layers the requirement for type distribution according to what this differentiation occurs, but in regards to the fixed 5 pct. and/or 15 pct. income tax. The idea that taxes will depend on the actual size of the individual's actual profits and not a flat income tax.
Furthermore, it is also proposed to abolish the fixed size of the minimum business license which will be dictated by the municipalities. Thus, the business license would cost less.
In addition, a review of the activities (work) is to be conducted which would consist of getting rid of construction and auto-repair activities. Thus, this is expected to encourage the transition to of taxation on actual profits incurred.
The battle for the contribution ceiling in "Sodra": is the Prime Minister backtracking?
An interesting situation has risen in regards to the contribution ceiling for "Sodra" which were abandoned in the month of November, 2016.
Since the contribution ceiling in "Sodra" depends heavily on their level which in turn means that for people whose income is of a higher level receive more benefits, as their contributions for "Sodra" for them are significantly lower.
At the same time, the plan prepared by the Government in regards to the proposal to once again reinstate and set the ceiling in "Sodra" at about 120 VDU per year.
According to, DELFI sources this proposal particularly enraged S. Jakeliūną a member of the fraction, that even went so far as to threaten the other members publically if the contribution ceiling will not be abandoned all together.
Moreover, it is alleged that Prime Minister S. Skvernelis having listened to the criticism of the members of the fraction will not present the contribution ceiling for "Sodra" to the public. S. Jakeliūnas himself declined to comment on the matter.
Targets set on the agricultural sector
According to, the business promotion in the country there is a proposal to provide a one year tax free holiday for small businesses, as well as one year holiday in regards to contributions paid to "Sodra" for first-time self-start ups in the business sector.
In regards, to those working on the basis of being self-employed the Government wants to start counting contributions paid to "Sodra" from 50 pct. of taxed income and level the contribution ceiling (28 VDU per year), as well as remove the contribution floors, in order for the contributions to be made from earned income.
Furthermore, the ruling party also has their sights set on the incentives and subsidies given to the agricultural sector, in particular farmers. A clear example of this is the proposal to remove the profit and income tax exemptions given to the agricultural sector.
In addition, to this the ruling party also suggest to lessen the excise duty exemptions in regards to fuel utilized by the participant of the agricultural sector. Thus, the tariff rate would be increased from 21 to 56 euros per thousand of litters which would influence the price by one 4 cents per litter.
The excise duty on diesel fuel will be increased
The proposed plan further, foresees the increase of the excise duty on diesel fuel from 330.17 to 347 euros per thousand of litters, which is planned to a 2 cents per litter influence on the price.
Several privileges will be removed
- The excise duty exemptions given to coal, coke and lignite is planned to be removed.
- Income tax exemptions for social enterprises will also be removed.
- The removal of income tax exemptions collected for sea ports, air navigation services and etc. is also planned.
- The removal of PMV tax exemptions given to hotel services (that reach 9 pct., while the standard is 21 pct.) is also planned in the plan.
- The removal of property tax (real estate) exemptions for properties providing health care and burial services is also foreseen.
A progressive tax rate in regards to much desired NT
In regards, to highly desired real-estate properties (NT) it is planned to tax the following progressively. For properties worth up to 220 thousand euros the tariff would be zero, and then would steadily increase by 2 pct.
0 pct. – for up to 220 thousand of euros.
0.5 pct. – for 220-300 thousand of euros.
1 pct. – for properties valued above 300-500 thousand of euros.
2 pct. – from 500 thousand of euros.
In regards, to promotion of innovation and investment it is planned to provide a 5 pct. tax relief on the commercialization of inventions, and a 100 pct. income tax exemption for those investing into technological renewal.
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