Lithuanian Trade Union Confederation on tax reform plan

The Lithuanian Trade Union Confederation supports the government’s proposal to aggregate income as a welcome breakthrough, but misses the reduction of tax burden provided for in the tax reform plan for lowest and middle income earners, the leader says.

The only worry is the reduction of 32% income tax rate to 25% for the people earning over 60 average wages per year, Inga Ruginienė noted, adding she is also concerned about the impact of further comments on the draft proposals in the Seimas.

The final version may be completely different from what was originally presented, no matter how “well-balanced” the initial draft was, she said. “Our biggest fear is that the Government scraps the income
aggregation and leaves it as a reduced-rate employment relationship, which is unacceptable to us as a trade union,” Ruginienė told the sitting of the Tripartite Council on Wednesday.

“The aim is, from our side, to make employment contracts more attractive. In the whole package of proposals, we miss the reduction of the tax burden on the lowest and middle income earners. We think it would be logical, if businesses have a lot of relief from corporation tax, why not make the tax burden
equal?” she said. The Lithuanian Trade Union Confederation proposes that employment contracts with an annual income of up to EUR  35,000 would be subject to a lower personal income tax of 15%.

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