Despite tax cut, Lithuanian revenues increase

  • 2006-08-23
  • From wire reports
VILNUS - Despite a cut in the personal income tax rate at the start of July, state budget revenues in Lithuania were higher last month compared with June.

It had been expected that a cut in the personal income tax rate, from 33 to 27 percent effective July 1, would curtail budget revenues. But according to data from the State Tax Inspectorate, personal income tax receipts amounted to almost 365.2 million litas (105.8 million euros) last month, up from nearly 354.5 million litas in June and well above the July target of 305.5 million litas.

Experts said there could be several reasons for this, including a decrease in unreported salaries or a considerable increase in personal incomes as many people took their summer vacations in July.
Under the existing legislation, the personal income tax rate should be reduced to 24 percent on Jan. 1, 2008. The government's program calls for cutting the tax to 20 percent.