The Lithuanian Ministry of Finance proposes to scrap a VAT exemptions for district heating, saying that a draft state budget for 2015 earmarks sufficient funds to compensate low-income families for increased heating bills.
Ministry of Finance
© DELFI / Valdas Kopūstas

Heating is currently taxed at 9 percent, well bellow the standard rate of 21 percent.

In planning next year's budget revenues and expenditures, the ministry took into account that the existing VAT exemption for heating expires at the end of this year and, therefore, earmarked additional funds for local governments to pay compensation to low-income families, Finance Minister Rimantas Šadžius said in a press release.

The reduced VAT rate for district heating sparks discussions each year and the economists continuously call to scrap it and, accordingly, to generate more budget revenue.

Finance Minister, parliamentary speaker Loreta Graužinienė and some other politicians have said that the reduced rate is not fair in social terms and, therefore, should be abolished, in particular as the prices of natural gas and electricity are going down.

Unofficial sources have said that this measure would also have the support of President Dalia Grybauskaitė.

The standard VAT rate in Lithuania is 21 percent. Until the end of this year, district heating is subject to the reduced 9-percent VAT rate.

BNS
Leave a comment
or for anonymous commenting click here
By posting, you agree to terms
Read comments Read comments

Belarus' road repairs may cause traffic restrictions at Lithuania's Medininkai checkpoint

The Lithuanian State Border Guard Service (VSAT) has warned of possible temporary traffic...

Money laundering story casts shadow on whole Baltic banking sector - Lithuanian c.banker

The recent money laundering story involving banks operating in the Baltic states has a negative impact...

State reserve to stand at EUR 1.5b late next year, Lithuanian fimin says

Lithuanian economy will slow slightly next year but the country will have an accumulated reserve of...

Lithuanian govt backs 2019 budget bill

Lithuania's government on Tuesday backed the bill on the 2019 state and municipal budget with a 0.4...

Lithuania's draft 2019 budget projects higher revenue and expenditure

Lithuania's draft 2019 budget projects higher revenue and expenditures and a larger deficit than this...