A draft amendment tabled by the Lithuanian Social Democratic Party (LSDP), the Lithuanian Farmers and Greens Union's junior ruling coalition partner, to reintroduce a reduced VAT rate on district heating and hot water services is "a slap in the face", Prime Minister Saulius Skvernelis said on Wednesday.
Saulius Skvernelis, Algirdas Butkevičius
© DELFI / Andrius Ufartas

"I see it as quite a slap in the face from the partners," he told reporters.

Skvernelis said that it had been agreed that the parties would make decisions on the VAT on heating and other tax exemptions within the coalition and that the Social Democrats had been "asked not to register (the amendments) and not to create confusion".

The prime minister's position is that a more socially just option is to subsidize heating and hot water bills for socially vulnerable households. According to him, the government is working to launch an electronic system to make it easier for people to file applications.

Some members of the Social Democratic political group in the Seimas on Wednesday registered a draft amendment that calls for reintroducing the 9 percent VAT rate on heating next January.

Among those who signed the amendment were Andrius Palionis, head of the political group, and Rasa Budbergytė, a former finance minister. Both Social Democrats in May voted against a proposal from the conservative Homeland Union–Lithuanian Christian Democrats to leave the reduced VAT rate in place for another three years.

The VAT rate on district heating and hot water services was raised to the standard 21 percent on June 1.

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