The draft law passed the adoption stage with 107 votes in favour, 18 abstentions and 2 votes against. The Seimas also approved accompanying laws on excise duties, public sector accountability, municipal budget revenue, public debt and corporate income tax.
Minister of Finance Gintarė Skaistė had said that the law is needed to ensure at least 3% of GDP defence spending.
The minister said prior to the sitting that a major share of revenue would be collected after raising the corporate income tax and excise duties on various products.
In 2025, revenue collected to the State Defence Fund is expected to amount to EUR 200 million.
The Seimas approved a raise of the corporate income tax by 1 percentage point, from 15% to 16%. It also approved higher excise duties on alcoholic beverages and tobacco products, and all types of fuel.
In 2025-2027, excise duties on electronic cigarette fluid will be raised by 150% each year.
In 2025, CO2 component on excise duties on fuel will stand at EUR 74 per 1,000 litres, kerosene – EUR 53.6 per 1,000 litres, oil gas and gaseous hydrocarbons, with an exception of natural gas – EUR 66.8 per tonne, coal – EUR 40.4 per tonne, coke and lignite – EUR 71 per tonne, peat used for heating – EUR 24.8 per tonne, gas oils – EUR 25 per 1,000 litres next year and EUR 50 in subsequent years.
EUR 25 million will be generated to the State Defence Fund from personal income tax. Personal income tax transferred to municipal budgets was reduced by the identical amount.
The law will take effect on 1 October 2024.
Earlier, the Seimas extended the temporary solidarity contribution on banks. The tax on extra banking profits is expected to bring EUR 60 million revenue to the State Defence Fund in 2025.
The fund will be used to accumulate funding for urgent acquisitions of weapons and military equipment, and boosting civil protection.
Lithuania plans to establish a division-sized military unit and acquire weaponry and ammunition for it, as well as to build military infrastructure, develop infrastructure for the German-led NATO brigade and develop counter mobility measures.
