IMF Urges Rebalancing Of Lithuania's Taxes
by Ulrika Lomas, Tax-News.com, Brussels
21 November 2017
The International Monetary Fund (IMF) has called on Lithuania to consider measures that will shift the emphasis of taxation away from labor and towards wealth.
Following the conclusion of the latest IMF staff visit to Lithuania, the Fund noted that the draft 2018 Budget includes measures to make the tax system more progressive, and to reduce preferential tax treatment of certain areas of the economy.
The IMF also observed that tax revenues are being propelled by strong wage growth and consumption, with the budget likely to remain in surplus as a result.
However, IMF staff argued that fiscal policy should "strike the right balance between maintaining a prudent stance and addressing social demands."
"Fiscal structural reforms should focus on growth-friendly measures that will support the authorities' social program," the IMF said in a statement. "On the revenue side, the emphasis should be on rebalancing taxes away from labor towards capital and wealth, and on improving compliance."
Earlier this year, the the IMF noted that Lithuania's tax-to-GDP ratio is one of the lowest in Europe, with about half of the difference relative to the EU average due to tax administration shortcomings and the shadow economy, and another 40 percent being the result of "low tax rates or the absence of certain taxes."
"In terms of tax policy, personal and corporate income tax rates are low and riddled with special schemes," the IMF said. "Wealth and capital income are lightly taxed, especially capital gains in real estate transactions."
To see today's news, click here.
Tax-News Reviews

A review and forecast of Cyprus's international business, legal and investment climate.

A review and forecast of Malta's international business, legal and investment climate.

A review and forecast of Jersey's international business, legal and investment climate.

A review of the latest budget news and government financial statements from around the world.
Stay Updated
Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.
By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.
To manage your mailing list preferences, please click here »
Network Blogs and Features
- North America Presses On With Tax Reforms »
- Digital Take Center Stage... »
- Budgets Bypass Manifestos, Manifestly »
- Reforms Continue Apace... »
- LLC vs Corporation - All You Need to Know »
- A Mixed Bag of Swiss Rolls and VAT Selection Packs... »
- A Flurry Of Activity »
- Tinkering Behind The Scenes »
- Why choose Hong Kong for starting an Online Business? »
- Hong Kong International Focus »