VILNIUS - Lithuanian President Gitanas Nauseda says lowering the personal income tax rate would be an economic stimulus measure that would be socially just and easy to administer and have an immediate positive effect.
"A temporary reduction of the personal income tax would not only bring benefit for the working population, but would also help increase the competitiveness of Lithuanian companies," Nauseda said in a press release on Monday.
"The positive effect of the reduction of the personal income tax would be felt immediately after the adoption of the relevant legislative amendments," he added.
According to the president's office, Nauseda proposes "to expand the country's economic stimulus package" to include a temporary cut in the personal income tax rate.
The president discussed his proposal with the leaders of all parliamentary groups on Monday.
The ruling coalition say labor taxation will be reduced, but it is yet to be decided if this will be done by cutting the personal income tax rate, as proposed by Nauseda, or by increasing the tax-free income threshold.
The opposition Liberal Movement strongly support the president’s idea. The conservative Homeland Union–Lithuanian Christian Democrats say they are not opposed in principle, but want the government to submit a revised budget for 2020 to the parliament for approval.