A number of Lithuanian companies recently joined the initiative urging politicians to agree on 4% of GDP defence spending and encouraging people to support the idea.
“This business initiative strongly helps us to make up our minds about a sustainable source [of funding], that is about the corporate income tax. The Government had proposed a 1% corporate income tax raise, which would result in EUR 120 million [budget revenue]. I believe we may boldly discuss what Social Democratic colleagues had proposed – a 5% increase of the personal income tax,” Skvernelis told the radio station Žinių radijas on Friday.
The standard rate of the corporate income tax in Lithuania currently stands at 15%.
Speaking about the initiative 4 procentai (4 Percent), the former prime minister said that businesses have shown that they would not object to additional taxation. However, he emphasised that other financing measures should be explored as well if defence spending is to be raised to 4% of GDP. According to Skvernelis, the funds could be accumulated in the national defence fund.
On Thursday, President of the Lithuanian Business Confederation (LVK) Andrius Romanvoskis said that companies endorsing the initiative 4 Percent agree to pay higher taxes so that Lithuania could earmark more funds for defence.
In 2023, Lithuania’s defence spending stands at 2.75% of GDP, but it will be sought for the figure to reach at least 3% in the nearest future.
The 4% GDP for defence initiative was launched by the association Unicorns Lithuania, the Lithuanian Business Confederation (LVK) and the Lithuanian Confederation of Industrialists (LPK). It is supported by the NGO Blue/Yellow, companies Telia Lietuva, Bitė Lietuva, Tele2, Tesonet, Vinted, Teltonika company group, HISK, Mantinga, Baltic Classifieds Group, ACC Distribution, Hostinger, Omnisend, Furniture1, Nord Security, Oxylabs, Surfshark, Telia Global Services Lithuania, Cybercare, Adtractive, Mediatech, Dokobit, law firm Walless, as well as basketball clubs Žalgiris and Rytas.