Having analyzed the new government’s program, the Lithuanian Confederation of Industrialists (LPK) welcomes its aim to create a stable tax system and take time for reforms; however, industrialists are worried about the new government’s wish to increase the state’s role without increasing competitiveness at the same time, reports ELTA.
“Lithuania’s population is shrinking, the number of those supported is growing, after a couple of years revenue from the European Union’s multi-annual budget will be cut down; therefore, the growth of competitiveness and attracting foreign direct investment are of critical importance,” said LPK President Robertas Dargis in a news conference on Dec. 17.
Dargis also says that in order to strengthen Lithuania’s entrepreneurship, advanced study reforms and support to private medicine should not be abandoned, as well as the most qualified and most needed labor force should not be taxed more.
LPK expert Aleksandras Izgorodonas said that the government’s program speaks about plans to increase social benefits and the possibility to link the minimum monthly wage (MMA) to the average wage could have a largely negative impact on the country’s competitiveness.
“Such a step would be the shortest way to the Greek abyss. Social benefits must be increased very wisely as the unemployment rates are high now because many jobless find it more profitable not to work and receive benefits,” he said.
According to the expert, upon introduction of progressive taxes, the most highly-skilled people would be taxed the most too, but these people are normally very mobile and can easily find jobs abroad.