Lithuania could follow Estonian model

  • 2007-10-12
  • From wire reports
VILNIUS -- Lithuanian Prime Minister Gediminas Kirkilas thinks the country can tackle its inflationary woes by copying another country's approach - Estonia.

"Maybe we should not reduce personal income tax (we reduced it by 6 pp a year ago and by 3 pp more now) and thus further increase people's expenditure," Prime Minister Gediminas Kirkilas said in parliament.

He suggests making a decision similar to that made in Estonia, which has introduced a programme of regular, stepped reductions in income tax rather than one-off, large-scale cuts.

"I talked to the Estonian prime minister yesterday. They have decided to cut personal income tax every year and this is a long-term programme, which clearly tells the market that income tax will be reduced by 1 pct per year for a period of ten years," Kirkilas said.