Farmers will not evade tractor registration tax – Lithuanian agrimin

  • 2020-03-02
  • BNS/TBT Staff

VILNIUS – Lithuanian farmers will not evade the duty to pay the pollution tax on acquired tractors, combines and other agricultural vehicles, Agriculture Minister Andrius Palionis says.

Failure to introduce such a tax would lead to an EU fine of several dozen million euros for Lithuania, the minister says, noting that Lithuania was supposed to introduce the tax for tractors and other agricultural vehicles back in 2007 when a three-year transitional period expired.

"If we fail to introduce tractors' legal registration, then the ministry should notify the EU that we apply a zero tariff. (…) The question is whether the European Commission will agree with that and everything will be fine. We will open our cards and show that in fact we don’t have such a tax since Lithuania's accession to the EU. The ministry calculated in December that Lithuania would face sanctions worth 34 million euros," the minister told the parliamentary Committee on Rural Affairs' sitting last week.

In his words, all farmers in the country would be negatively affected by EU sanctions. "They will not receive any support funds until they pay," Palionis said.

The Environment Ministry suggests introducing such a tax for farmers as of 2021.

While drafting plans for a pollution tax, the ministry wanted last year to include tractors and other agricultural vehicles in the taxation scheme based on the level of emitted CO2, alongside cars. But after it turned out that agricultural vehicles don’t have such a calculated rate, the idea was discarded and it was decided to link the tax with the level of burnt fuel, and eventually the decision was made to focus on a vehicle's power.

If the Seimas introduced such a tax, it would be paid every time a vehicle was registered, including its initial purchase and every time after ownership changed.

Under the existing amendments to the environmental pollution law, owners of agricultural vehicles with up to 70 kilowatts in power doe not pay any tax. The lowest tax rate would stand at 40 euros, and the highest would amount to 600 euros, if the power exceeds 350 kilowatts.

There were 4,038 items agricultural vehicles with their power exceeding 60 kilowatts in Lithuania in 2018, according to data from the Agricultural Information and Rural Business Center.

The Environment Ministry estimates that the state budget would receive around 0.9-1 million euros in additional revenue a year from the new tax.