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Lowering the value-added tax (VAT) rate for all goods and services would be preferable to exemptions on select products, like food, Lithuania's Finance Minister Rimantas Šadžius.
Rimantas Šadžius
Rimantas Šadžius
© DELFI / Mindaugas Ažušilis

"I would not like to see the budget losing a chunk of revenue, which would inevitably happen if we suddenly cut VAT rate for a group of good," Šadžius told Žinių Radijas on Thursday. "The same could not be said about cutting the overall VAT rate. Sure, it would affect budget revenues in some way, but we need to look into whether the effects of gradual VAT lowering would not be outweighed by resulting economic growth."

The Lithuanian parliament is considering a bill on cutting VAT rates on staple foods from the general rate of 21% to 5%.

Meanwhile Prime Minister has said he does not agree with exemptions on select goods, but suggested instead cutting the general rate to 18%.

Social Democrat MP Arvydas Mockus, member of the Economy Committee, drafted a bill to that effect this week.

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