On Monday, the LPK presented a roadmap of seven „critical“ steps leading to „full tax stability“ in the country from 2024 to 2026.
„We are hearing from politicians about two possible (&) reforms – one of them could take place right after the elections – amendments to the personal income tax law, which are now on the Seimas agenda (&). These changes will significantly raise taxes on investors. The other reform is said to be taking place immediately after the change of coalition, and also includes significant tax changes – such as a 4% rise in corporate tax,“ LPK President Vidmantas Janulevičius told a press conference on Monday.
He reiterated that the tax reform has already been adopted this year, with the Defence Fund project in place which set out a 1% hike in the corporate tax rate for large businesses.
„If these scenarios were to turn into reality, changing tax rates as many as three times would worsen business conditions in 2024. In fact, the mere fact that this is being debated affects business expectations negatively,“ Janulevičius stated.
The industrialists called for boosting investment in research and experimental development (R&D), which is currently given up to 1% of GDP (around EUR 0.7 billion). The LPK president said R&D allocations should total EUR 2.8 billion per year.
The confederation also proposes to simplify tax incentives for companies investing in labour productivity, increase business access to capital and the development of venture capital funds, raise funding for scale-ups and ensure competitive prices for electricity from renewable sources over the next two years.
The LPK’s another proposal is to reduce the administrative burden on business by 30% and public spending by 20% by 2030. It also suggests an audit of the retraining system for employees, and sticking to a coherent policy for attracting local and foreign talent.
Speaking of national defence spending, the LPK president said the government is in a position that allows borrowing more.
„We believe that it is really worth borrowing at the moment. Lithuania’s debt as a percentage of gross domestic product is one of the lowest in the European Union – at 36%. It used to be [lowest] in Estonia, but the Estonians cannot borrow now because they have a big budget deficit. (&) That is why they had to raise taxes to be able to borrow in the future,“ Janulevičius explained.
The LPK’s roadmap suggests Lithuania’s defence self-sufficiency should be doubled by 2030, with 40% of defence needs met by local or foreign industrial producers.
The industrialists also propose doubling the share of research innovation allocated to the defence industry, and drawing up a plan for the development of defence industry in regions.