Lithuanian Finance Minister thinks progressive taxes would do more harm than good

VILNIUS - Progressive taxes in Lithuania would do more harm than good as there are too few people who earn enough to be subject to higher rates, Finance Minister Vilius Sapoka said on Tuesday.

"I am referring to my team of analysts, who are of the same opinion as the OECD. If progressive taxes were introduced now, the harm would likely outweigh potential benefits, which is programmed into our revenue structure," Sapoka said during a presentation of SEB Lithuania's economic forecasts.

"As an example, people whose income is higher than 4,000 euros account for 0.8 percent," he said.

According to the minister, the government would not collect more revenue if it introduced progressive taxes.

"It's merely an illusion, no more than a symbol, to expect that we will collect much more revenue and solve poverty or income inequality issues," he said.

In Sapoka's opinion, taxes on lowest earners have to be lowered even if progressive taxes are not introduced.