Lithuania’s unfavorable tax system deters highly qualified foreign workers – advisor

VILNIUS – Lithuania's tax system discourages highly qualified foreign workers from coming to the country, while high-earning Lithuanian citizens opt to work abroad, Remigijus Simasius, a former mayor of Vilnius, said on Tuesday. 

Figures from the Migration Department show that only about 3 percent of all foreign nationals in Lithuania, or 6,200 individuals, are engaged in highly skilled occupations.

"This means that our tax system is entirely unfavorable for people who create high added value," Simasius, now a senior advisor at the consultancy and analytics firm Centenary Policy Institute, told LRT Radio.

Lithuanian citizens also choose to work abroad for the same reason, according to the former mayor. 

"In fact, we face a more significant problem: when Lithuanian citizens start earning a lot of money, they encounter the Sodra (social security insurance) ceiling and other issues, prompting them to leave for other countries so that they can pay lower taxes," he said. 

Simasius also said that many low-skilled foreign workers come to Lithuania because local residents are reluctant to take on low-paying jobs.

"As a society, we are becoming wealthier, which means a deacreasing number of our citizens are willing to do low-paying jobs. Someone has to do them, so we invite newcomers," he said. 

For the first time in Lithuania's history, the number of foreign nationals living in the country has surpassed 200,000, including over 145,000 citizens of Ukraine and Belarus, more than 16,000 from Russia, and around 4,100 from Kyrgyzstan and Uzbekistan.

Almost half of all foreigners in Lithuania have come to work in "shortage occupations", such as long-haul truck and passenger-carrying drivers, construction workers, and employees in other industrial sectors.