Brazauskas leery of new tax

  • 2005-03-09
  • By TBT staff
VILNIUS - Prime Minister Algirdas Brazauskas said last week that he was skeptical of a Cabinet proposal to levy a new real estate tax on individuals, and that the ruling coalition would consider options to avoid it.

"I do not have the slightest wish to introduce that property tax," he told Ziniu Radijas radio.

The prime minister was responding to popular indignation over the tax, which was made during a meeting of ruling parties 's the Labor Party, Lithuanian Social Democratic Party, New Union (Social Liberals) and the Union of Farmers' Party and New Democracy Party. Coalition leaders noted, however, that individuals in possession of a single house, garden plot or garage would be exempt from the new tax.

"What is more, the uproar and dissatisfaction far outweigh the possible benefits of the new tax for the budget. That is why we will have to tackle options to give up this tax," Brazauskas said.

As part of the new tax, party leaders agreed to cut the income tax rate to 24 percent (from 33 percent) during a three-year period. In practice the rate would be slashed by 3 percentage points per year starting in 2006.

Although the decision was the result of negotiations between the ruling coalition leaders, Social Liberal Party chairman Arturas Paulauskas noted the next day that some of his party colleagues sounded doubtful about the need for a new tax.

President Valdas Adamkus also stated that he had reservations about the new tax.