Simonyte: no tax on cars yet

  • 2012-06-14

VILNIUS - On Wednesday, the government proposed the Seimas of Lithuania not to discuss a draft law on taxing cars and other vehicles.

According to Minister of Finance Ingrida Simonyte, the draft law submitted was inappropriate, writes LETA/ELTA.

"Such tax would not conform to the practice of taxing cars adopted in other countries, nor as environment tax, neither as a vehicle tax which could finance road infrastructure," Simonyte said after the government's sitting on Wednesday. 

"I have said more than once that the transport tax could and should exist in Lithuania. Watching from the short term perspective, [it would be good] due to faster elimination of the budget deficit which means faster reduction of discrepancy between revenues and expenditures. Introducing a vehicle tax or a real estate tax is less harmful for the economy than increasing the income, labor or consumption taxes which are already high in Lithuania," Simonyte said.

Simonyte added: "Watching from the long term perspective, when we have balanced finance, a tax on vehicles or real estate could substitute a part of taxation on labor. All of us know that Lithuania's problem is that its total tax level is low, while labor taxes are high and it leads to some certain imbalances, while labor in the EU, as we know very well, is a mobile factor and not reacting to it is illogical. A part of the tax burden could be moved to other factors, one of which is property that either is untaxed or taxed minimally in Lithuania.

"Attitude towards this issue will be reflected in the parties' election programs, and when a new government prepares a program as well as its attitude towards the taxation system, they will say whether the vehicle tax is necessary in Lithuania," Minister Simonyte said.