Non-taxable income to grow slower next year – PM

The non-taxable income (NPD) threshold will be moving closer to the minimum wage rate at a slower pace next year due to increased spending on defence, roads and social services, Prime Minister Ingrida Šimonytė said Tuesday.

This year, the monthly minimum wage (MMA) is EUR 924 before taxes. It is set to increase by 12% to EUR 1,038 in 2025.

The non-taxable income was raised by 20% in 2024 and now totals EUR 747 before taxes.

The increase in the non-taxable threshold rate around EUR 300 million to the budget in lost revenue.

„It will be absolutely impossible to hike up the NPD next year to the same extent as the MMA,“ the prime minister told the Verslo žinios news website.

Šimonytė said this year’s increase in the NPD, which was twofold than the MMA one, was a „courageous step“. It was done with the budget deficit in a position to reach the Maastricht criterion’s limit of 3% of gross domestic product (GDP).

Politicians had pledged to bring the non-taxable income on a par with the minimum wage by 2028.