Lithuania's value-added tax rate on district heating and hot water supply increases starting on Thursday, from the reduced 9 percent rate to the standard 21 percent, but so does the number of households eligible for partial reimbursement of heating and hot water costs.
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The parliament voted earlier this year to cancel the reduced VAT rate, which was introduced in January 2001 and remained in place for 15 years, as of Jun. 1, 2017.

Finance Minister Vilius Šapoka has said on more than one occasion that the reduced VAT rate is socially unjust, a position supported by Prime Minister Saulius Skvernelis.

However, President Dalia Grybauskaitė maintains that scrapping of the reduced rate is politically, socially and financially unjustified. According to the president, the measure would bring an additional 30 million euros to the budget, affect 700,000 people and foster "a society of benefit recipients".

The parliament last week decided to broaden the scope of reimbursement recipients. Starting on Thursday, households will be eligible to claim reimbursement if their heating bills exceed 10 percent of their income.

The Social Security and Labor Ministry estimates that around 250,000 people will be eligible to claim reimbursement after the income threshold was lowered to 10 percent.

A total of 17.9 million euros was spent to reimburse heating and hot water expenses in 2016.

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