Jan. 8 (Bloomberg) -- Lithuania plans to raise taxes on high earners and property starting in 2014 as part of an overhaul of the Baltic nation’s tax system aimed at boosting revenue, Finance Minister Rimantas Sadzius said.
The revamp will involve personal income tax, the untaxed minimum and social-insurance taxes, Sadzius said today. It will also widen the scope of the property tax and may include a review of value-added tax breaks, according to the minister.
“Making taxation progressive shouldn’t hurt average earners,” Sadzius said in an online conference on the delfi.lt news website. “The higher rates will be for people with very large salaries.”
Prime Minister Algirdas Butkevicius, whose government took office last month, made introducing progressive income taxes a pledge in his election campaign and wants proposals by April for enactment in 2014. At present, Lithuania taxes both personal and corporate income at a flat rate of 15 percent, while dividend income is taxed at 20 percent and VAT at 21 percent.
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