The scope of shadow economy has visibly decreased over the past decade in Lithuania, Finance Minister Vilius Sapoka says as it has become fashionable to pay taxes.
Vilius Šapoka
© DELFI / Karolina Pansevič

"There are many ways to calculate that size of the shadow economy, but irrespective of the calculation methods, the tendencies are clear (…). We see that the shadow economy has shrunk 10 percent in Lithuania over the past decade," Sapoka told a conference on shadow economy on Tuesday.

In his words, the fact that the VAT obligation has been rising faster then consumption since 2017 also points to a shrinking shadow.

"We see a sudden surge since 2017, with VAT obligation rising way faster than consumption. In other words, the shadow is shrinking," the minister said.

Based on his presented figures, VAT collection rose 8.5 percent last year, and consumption grew 6.3 percent.

"When I said earlier it should be fashionable to pay taxes, there was a lot of laughter. But now I think it has become fashionable to do so. (…) I think the situation is changing and we need to thank the people of Lithuania for that," Sapoka added.

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