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Value-added tax (VAT) discount for centralized heating and hotels will remain, says Lithuania's Prime Minister Saulius Skvernelis, adding that the government would announce the proposed tariff next week.
Central heating
Central heating
© DELFI / Audrius Solominas

Up until this June, the VAT tariff for heating was 9 percent, a tariff also applies on accommodation services. The government has earlier considered discarding the privileges and start applying the usual 21-percent size.

The VAT discount for heating was agreed between the prime minister and the opposition conservatives on the reform of the forestry sector, while the decision to leave the lower tax for hotels was made in light of regional competition and projects that are being developed.

The government is discussing a new 15-percent tariff for hotels, however, the information is yet to be confirmed by the prime minister.

"The exact figures will be announced next week. We have signed an agreement with the conservatives on introduction of a new lower tariff on heating – this will be done," Skvernelis told BNS.

"This will also be good news for hotels. We assessed the risks of how Lithuania would look among other European Union countries, if we had a 21-percent tariff and the impact it would have on business. This is part of our exports. We have at least 20 hotel developers, business plans in advance and the drastic raise would have an effect," said the prime minister.

Currently, the lower 9-percent tariff will also be applied on books and transport services, while a 5-percent tariff is applied on medication. Under one of the scenarios discussed at the government, all of the goods and services should be subject to a 5-percent tariff starting 2018.

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