MEP Blinkevičiūtė said in an interview to the radio station Žinių radijas on Friday that the LSDP also cannot support a raise of the value added tax (VAT) tariffs as many people live from paycheck to paycheck or from pension to pension.
According to the politician, the current ruling majority already had to introduce proposals made by the governor of the Bank of Lithuania on 14 March. She says that, unfortunately, the tax reform has not moved ahead and suffered “a complete fiasco”.
The MEP accused the lacking leadership in the current coalition for delays with adopting proposals on defence funding.
Blinkevičiūtė added that the LSDP had meanwhile suggested to continue taxing banks with the solidarity contribution for defence or issuing bonds to borrow money for defence from people, as well as raising corporate income tax for major companies that earn the highest profits.
The central bank stated Thursday that if additional funds for defence are secured solely by raising taxes, then this might destabilise the entire taxation system. Therefore, the central bank called to secure funding for defence from a couple of different sources.
The Bank of Lithuania also suggested that defence spending could be increased after reviewing property taxes, introducing a universal real estate tax and eliminating certain tax exemptions, such as on district heating, a 5% corporate income tax rate for small companies etc.
Moreover, the bank said that under current economic conditions revenue from the temporary solidarity contribution paid by banks would be much smaller.
Additionally, one-off procurement of military equipment could be financed by borrowing funds.
Prime Minister Šimonytė is planned to hold another meeting on sustainable defence funding on 18 March.