Labour Party’s leader disagrees that excise duties would be raised to fund defence

Labour Party’s leader Andrius Mazuronis objects to the Government’s proposal of raising excise duties in order to increase defence spending. He argues that progressive measures were not put forward and thus the lowest-income earners would be affected the most.

„It is bad that a vast amount of lacking funds for defence would be collected through various excise duties. For instance, why is it proposed to include a EUR 0.06 levy for defence in the price of 1 litre of fuel? (&) If people earn EUR 1,000 per month, naturally, they spend around 30-40% on fuel. Whereas someone who earns EUR 1 million spends 1-2%,“ Mazuronis told the radio station Žinių radijas on Friday.

The MP argues that the idea to raise excise duties would impact low- and average-income earners the most, while the Government is not discussing greater capital taxes or progressive income taxation.

Moreover, although the Labour Party’s leader supports extending temporary bank contributions on extra banking profits, yet he calls for a closer oversight of financial companies so that fees would not be transferred onto customers.

Moreover, Mazuronis criticised business initiative aimed at raising Lithuania’s defence spending to 4% of GDP. He stresses that Lithuania needs air defence systems, drones and defence systems against ships, but not „proposals on paper that do not work in practice“.

„We need money but not a company’s permission for employees to undergo training, where they would learn to distinguish a weapon from a broom and make their bed,“ said the politician.

As reported, the Ministry of Finance has presented proposals on sustainable sources of defence funding. It suggests extending the bank solidarity contribution, raising the corporate income tax by 1 percentage point, raising excise duties and imposing an additional fee on some insurance agreements. It is estimated that the measures would boost defence funding by nearly EUR 300 million in 2025 and by around EUR 420 million in 2026.

Extending the temporary bank solidarity contribution for a year would bring EUR 60 million budgetary revenue in 2025.

Excise duties on alcohol and tobacco would be raised. „A security component“ of EUR 0.06 would apply on all types of fuel and a 10% fee would be imposed on insurance agreements with an exception of life insurance.