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The European Commission issued a range of recommendations on how to improve Lithuania‘s economy including improving tax compliance particularly VAT, adjusting the education system to the needs of the labour market and increasing productivity.

The Commission said one of the largest challenges facing the Lithuanian economy is the drop in numbers in Lithuania's working age population. The Commission notes that there are indications that certain sectors of the economy are facing shortages of skilled labour.

The recommendations were presented to the Lithuania‘s Education, Science and Culture Committee yesterday. The Commission recommended action in three key areas for Lithuania in the period 2016-2017:

1. Ensure that the deviation from medium term budgetary objectives in 2016 and 2017 does not exceed the permissible limits associated with systemic pension reform. Reduce the tax burden on low income earners by shifting the tax burden to other sources, improve tax compliance, in particular in the field of VAT.

2. Increase investment in human capital and to address skilled labour shortages by adjusting the education system to the needs of the labour market, improving the quality of education and applying active labour market policies, promoting adult learning.

3. Take measures to increase productivity and improve the implementation of new technologies in all sectors of the economy. Improve innovation policy coordination and promote private investment, including developing alternative sources of funding.


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