Emigrants back on political agenda

  • 2005-08-31
  • By Milda Seputyte
VILNIUS - Nearly 15 years after regaining independence, Lithuania's large-scale emigration trends are finally showing their affect, with unofficial statistics indicating that over 300,000 have left the Baltic state since 1991.

For a country with a population of 3.4 million people, this is the equivalent of every Kaunas resident packing their bags and leaving the country.

Alarm over the issue has served as a recurring theme in recent political discourse, and many admit that little has been done to prevent such emigration flows.

The question under current debate is just what can be done to retrieve nationals, since the country's labor pool is sinking.

"As a politician, I am ashamed because neither my party nor I did anything so that Lithuanians could live well and in honor," said Conservative MP Audronius Azubalis.

Last week Azubalis accompanied fellow Liberal Centrist Gintaras Steponavicius to the Lithuanian community's first congress in Ireland. The organization now includes some 100,000 nationals.

"The atmosphere in Dublin is that the city's becoming quite Lithuanian. Indeed, it feels like some 100,000 Lithuanians live there," said Deputy Parliamen-tary Chairman Steponavicius.

In a written address to the community, Conservative leader Andrius Kubilius said he feared that Lithuania had lost a large contingent of its most talented citizens, who may never return home and whose children may never speak Lithuanian.

True enough, a majority of emigrants aren't rushing to return home.

"The topic [of Lithuanian taxes] was discussed very seriously in the congress. I explained that this problem is now being seriously tackled," Steponavicius said. "As opinion about those working abroad changes, we hope that a turning-point in the story is underway."

Lithuanians favor countries such as Spain, Ireland and Great Britain, where the income tax is approximately 20 percent. Yet according to the Baltic state's present taxing policy, individuals are required to pay the income tax difference when they return home. As a result, another 13 percent of legal earnings made abroad are allocated to the Lithuanian budget.

On top of that, the annual tax-free minimum in Ireland, for instance, is 25,000 litas. It's only 4,000 litas in Lithuania, causing repatriates, once again, to pay the difference.

Clearly annoyed with this tax burden, emigrants either hide their capital or delay their return home.

"In attempts to avoid taxes, the money is either smuggled in or it bypasses Lithuania. The legislation must be changed so that our citizens won't have to pay twice for their legal earnings," said Steponavicius.

Responding to widespread demand, the Ministry of Finance has prepared a new legal framework where foreign employees will no longer have to hide their earnings when returning home.

If they already paid income tax in a foreign country, individuals will no longer be charged with additional taxes from their earnings.

Parliament is expected to approve the policy, which will come into force on Jan. 1.

Since those working abroad illegally don't pay taxes, they will be charged as before.

"Those who work illegally won't be able to say that their income is being taxed twice," said Ingrida Simonyte, secretary of Ministry of Finance.

"It is logical not to tax people twice if taxes were paid abroad," Vadimas Titarenko, analyst of Nord/LB Lietuva, was quoted as saying.

"Perhaps people will stop crossing the border with money in their pocket and choose a civilized method 's a bank transaction," he continued. "Then they will have a clear understanding about capital flows from abroad, and this way it will be easier to make economic prognosis."