Although, the value added tax (PVM) exception was eliminated with an easy hand. It would appear that the same hand is not in a hurry to remove the benefits and/or reduce them in regards to farmers, as currently it is still unclear how they will be passed through in the Parliament. According to, the opinion expressed by the political scientist Rima Urbonaitė to DELFI. However, “peasant” Tomas Tomilinas notes that the ruling party does not apply a double standard and has reviewed the benefit the PVM relief given to the sector gives, before any decision was made to remove it.
Since the PVM relief for heating given to the residence in cities was removed on the 1st of June, is a painful question was raised: as the heating bill is even painful for higher-income wage earners. At the same time, however, some benefits given to farmers of which there are more than two dozen are only up for proposal regarding a possible removal.
Thus, the question is raised whether the Peasant and Green Union (LVŽS) of Lithuania ruling coalition is applying a double standard and flattering their electorate, while pushing aside the interest of the city populations which they do not regard as their voters?
Although, their moving in the right direction, mistakes made still remain
While presenting their taxation and social system improvement plan, the ruling party noted the proposal to remove the profit and income tax in regards to the agricultural sector. Furthermore, there is also a proposal made to leave but shorten the excise duty exceptions given to the agricultural sector segments which would be increased from 21 to 56 euros per thousand of litters. Thus, having a 4 cents per litter influence in price.
According to, the chief economist regarding the Baltic states of “Danske Bank” Rokas Grajauskas the tax burden placed on framers would increases in to these changes. Thus, while the justice in regards to tax burden felt by them would increase, there would be still be a lot of benefits and tax exemptions given to them left.
“We have a situation where the effective tax rate applied to framers, taking into consideration all of the benefits applied to them, would only increase by a few percentage points. It is obvious, that this is not right, when compared with other population groups and the tax rate applied to them, for example the employed workers that have a 40 pct. tax rate applied to them. This is probably intended to remove privileges given to certain groups, thus equalizing the tax burned for all. However, many of the advantages and passages for them remain, even though we are going in the right direction. Truthfully, however I think that we will still see farers blocking roads, and a huge backlash. Remember, farmers know how to protests and will find their patrons in the Parliament” – stated R. Grajauskas.
The issue regarding the double standards may become even more aggressive
According to, R. Urbonaitė a political scientist for Mykolas Romeris University (MRU) while the removal of the PVM relief for heating was rushed and not all arguments were hear. The sensitive mature of the benefits applied to farmers makes the politicians seek compromises.
“If they would have ignored any benefits applied to the farmers, the issue of the double standards for farmers would have been raised sooner. However, it is still unclear if the benefits given to the farmers will be removed or lessened when they will go through the Parliamentary filter. It is not the first time that we see a confrontation and/or a completely different imagination coming from the Government and Parliaments sides. I would not be surprised if something along the lines of this would happen, furthermore they will still be trying to protect certain groups and their lances will be broken” – stated R. Urbonaitė.
Vytautas Magnus University’s (VDU) professor and political scientist Algis Krupavičius regarding the matter has stated that the “peasants” as many other political party is trying to take into account, what their voters think on the matter.
“Since the majority of the LVŽS party’s voters live the rural areas, many of them are involved in agricultural activities which is why they are so biased in their actions, and trying to defend the interests of certain groups over others. On the other hand, this is not something to be surprised over as every other political party is doing the same thing, although sometimes this may be seen less. However, bias regarding certain interests groups is seen for every party. This – is nothing new to the entire world.
We need to hope, that the ruling coalition will not take decision with which they would give very high benefits to one or more interests groups. They would be foals to do so, as a policy such as this would be extremely short-sighted and the next government would immediately have strong reason to change such a policy” – stated the professor.
They will listen to the framer, as they did to the recipients of the PVM relief regarding heating
According to, T. Tomilinas a member of the LVŽS fraction and the vice-chairman of the Parliamentary Committee on Social Affairs and Labour the view that the ruling coalition is applying double standards is false.
“I think that the Government is taking a brave step whose major impact will be felt by the large farmers. Thus, smaller farmers will feel it less which is socially responsible. The agricultural sector is critical for our country: it is one of the few sources of work for the rural areas where unemployment rates are the highest. This has nothing to do with the number of our electors, as only a few thousand farmers remain, currently, we are just thinking like statesman.
The PVM relief provided for heating was not an easily made decision. We made a big reform regards the social support system – managed to reduce the level of government spending here by almost 10 pct. from which the heating compensation was paid. No one has so far dared to reduce this level which would allow us to reach the goals of the energy poverty reduction policy. Thus, you cannot say that this was done with an easy hand, we were looking for the best solution” – stated T. Tomilinas.
According to, the politician there is a need to understand that the LVŽS propose a socially correct step, which increased the tax rate for the large farmers, and reduce it for the smaller farmers.
“This – is a very brave step. And the fact that we will do everything by measuring its impact, and will listen to the voice of the farmers is normal. This was also done in regards to the heating benefits – we made informed choices” – stated the interlocutor.
They are not settling down in regards to relief for heating
Although, the removal of the PVM relief benefit for heating was opposed by both members of the ruling coalition, and the members of the opposition in the Parliament. According to, Jurgio Razmos a member Homeland Union-Lithuanian Christian Democrat (TS-LKD) group in Parliament stated that the removal of the PVM relief benefits for heating was unfair, as people receive high heating bills because of the imperfection of the infrastructure.
“Currently, without touching the benefits given to the farmers, the ruling coalition has only eliminated the VAT relief benefits given towards heating to which the urban population is sensitive too, because of the shortcomings of the heating system itself which results in high heating bills for people living in non-renovated buildings. However, I would not want to set the urban and rural populations against one another which is why the ruling coalition let them down regarding the PVM given to heating relief, as our arguments were not heard.
It would seem like the social democrats still have hopes to revisit the question, until autumn when the relief benefit could be applied as soon as possible. However, they could have actively participated and voted, earlier that our proposed proposal would have been accepted. It is a pity that they think like kids, that they will implement this idea as a project and everything will be alright, as they look not at the content but rather the providers” – stated J. Razma.
According to, the chairman of the Lithuanian Social Democratic Party (LSDP) Gintautas Paluckas that the LSDP representatives have repeatedly tried to lower the PVM relief benefit for heating, if the LVŽS members fail to do so.
“We have stated more than once that when reconstruction plans regarding taxes will be presented in the Government regarding the relief benefits, if our coalition’s partners will not offer any suggestion in regards to lowering the PVM relief benefit given to heating, we will. It needs to be a set tariff, instead of one that is being approved every half a year.
Furthermore, the opposition was both softer and harder, as well as very categorical at one point until the Prime Minister began to speak, that they will negotiate – the tariff rate can be 9 pct., or even 11 pct. We are not backing down anywhere and will do everything, as our views differ here: we want for this service to be a service that’s price is set by the state, which would be affordable, while at the same time our colleagues have a different concept of social justice” – stated G. Paluckas.