Limiting Vilnius' share of personal income tax revenues collected in the city goes against the Constitution, the Constitutional Court said on Thursday in a ruling that will take effect on January 2, 2016.
Vilnius Municipality building
© DELFI / Šarūnas Mažeika

"I am glad that the Constitutional Court made the right decision. It was stated that allocating a lower share of personal income tax to Vilnius without any criteria was unlawful. This means that Vilnius is to be given a fair, higher share of the personal income tax," Vilnius Mayor Remigijus Šimašius said on his Facebook page.

The capital city currently is allowed to keep 48 percent of the personal income tax collected in the city.

A group of lawmakers turned to the Constitutional Court in 2012, saying that the limit, which was set at 40 percent at that time, not only undermined the interests of the city and its people, but also harmed the image of the country as a whole.

Vilnius Regional Court has also turned to the Constitutional Court as part of its examination of Vilnius Council's request to increase the share of the personal income tax left to the city to 60 percent.

Existing law allows leaving 94 percent of personal income tax revenues to Kaunas, 86 percent to Klaipėda, 99 percent to the district of Mažeikiai and 100 percent to all other municipalities.

Less politics

The Lithuanian Constitutional Court's ruling calling for clear regulation of the allocation of personal income tax revenues to local authorities may help depoliticize this issue, Gitanas Nausėda, advisor to the president of SEB Bankas, said on Thursday.

"I agree that it would be very good if decisions to limit the share of personal income tax going to one or another local authority were based on certain objective criteria, rather than on some subjective considerations. If such a system of criteria were developed, that would be another step toward depoliticizing these decisions," he told BNS.

The economist believes that Vilnius' share of personal income tax should be higher than the current 48 percent of the revenues collected in the city.

"I think that Vilnius' share should be higher. But nobody can say today if it should be 54-55 percent or 49 percent," he said.

It is prohibited to copy and republish the text of this publication without a written permission from UAB „BNS“.

Producers: US tariffs to make dairies seek new markets

US import tariffs on Lithuanian dairy products will force exporters to look for new markets, the...

Cybersecurity expert in Vilnius: guard your cables and cords and never borrow from others (1)

Oct. 15th, 2019, Australia’s Deakin University Prof. Matthew Warren, Deputy Director of the Centre...

Dairy producers start feeling impact of rising US export duties

Lithuanian dairy producers say they have already felt the impact of duties , rising as of Friday,...

Nauseda doesn't expect EU budget deal by end of 2019

EU member states differ too much in their positions on the bloc's next multi-annual budget to...

Dairy products subject to 25 pct US import tariff

Lithuanian cheeses, yoghurts and other dairy products are now subject to a new 25-percent import...