Lithuanian president: achieving socially-oriented budget requires open talk about sources

VILNIUS - Achieving a socially-oriented budget requires open discussions about additional sources of funding, Lithuanian President Gitanas Nauseda said on Tuesday. 

If any increase in taxes is avoided, the public budget will remain so low that "we can only dream about a welfare state", he said. 

According to Nauseda, increasing the budget deficit to fund social policies is not an option either, because that would mean "heading straight into a financial crisis". 

The president proposes to raise additional money for social security needs by slowing the rate of reduction of labor taxes, bringing the excise duty on diesel fuel used for agricultural purposes closer to the standard rate, and increasing taxation on non-employment income.

The government, for its part, has moved to impose a tax on polluting cars and expand the property tax base, but it has so far failed to muster enough support in the Seimas to push through the proposals. 

Politicians are also discussing new taxes on bank assets and large retailers, but no decisions have been made yet. 

Some trade unions and employers' organizations say tax changes are being rushed in without proper public discussions.   

Nauseda says, however, that only concrete proposals can produce results.

"Everyone speaks fine words about social policy issues, but when it comes to what we put on the table and what sources will be used to fund that, everyone scatters into the bushes," he told the Ziniu Radijas radio station on Tuesday. 

According to the president, additional revenue is necessary to increase pensions and the child benefit at a faster rate and to ensure adequate financing of education, health and defense.

"At whose expense are we going to do all this? Are we going to find some kind of wealth-bringing magic creatures? That is why we say that if you want to act responsibly and talk about a social budget, be so kind as to propose the sources," Nauseda said.

The European Commission says in Country Report Lithuania 2019 that "the power of the (Lithuanian) tax and benefits system to reduce income inequalities (is) among the least developed in the EU.