Ministry mulls abolishing social tax

  • 2006-01-04
  • From wire reports
VILNIUS - The Finance Ministry does not rule out discussing a removal of the so-called "social tax," an additional levy on corporate profits that took effect Jan. 1, 2006 and is due to last two years.

In June last year, Parliament passed the Interim Law on Social Tax, which provides for levying an additional 4 percent tax on profits in 2006. That amount is to be reduced to 3 percent in 2007, after which it would return to the pre-2006 level 's 15 percent 's in 2008.

However, Finance Minister Zigmantas Balcytis said that the government might discuss eliminating the tax altogether in 2007 rather than reducing the rate.

"If revenue collection is as successful as it is this year, we may discuss whether [the social tax] should remain in the coming year," he said in a news conference Dec. 29.

The ministry estimates that the social tax will generate 400 million litas (116 million euros) in additional budget revenues this year and another 300 million litas in 2007.

The central government collected 11.1 billion litas in budget revenues during the first 11 months of this year, or 7.5 percent more than planned. Total revenues including EU support funds came to 12.7 billion litas.