Big companies may be taxed to support competition regulator

Some companies in Lithuania may face a new tax through which they would be obligated to support the Competition Council (CC). Businessmen have expressed their opposition to the tax, indicating that it would twist competition and force the tax burden onto consumers’ shoulders.

The proposal, registered with the Seimas, suggests that companies whose annual income exceeds €20 million spend €6,000 on market oversight.

“This independent financing would protect competition institutions from the influence of money. Currently, many EU and global institutions are financed directly from budgets without participating in the formation of those budgets. Therefore, if the CC makes decisions directed against state institutions, ministries or municipalities, how can we do that? This would naturally cause a certain level of dissatisfaction,” said Šarūnas Keserauskas, chairman of the Competition Council.

Italy and Portugal both have competition regulation institutions that are supported by business fees. In those countries, companies did not resist.

Lithuanian businessmen, however, were not happy about the proposal. “I simply wouldn’t like the principle of it. At some point, you could be competing with a company that makes 18 million a year and it will not face any additional fees,” said Gintautas Pangonis, president of Grigeo Grigiškės. “That would be a precedent for other services to appear – perhaps consumer or ministerial services. One belongs to the Ministry of Economy, other belong to other ministries, but perhaps we should pay them to exist as well?”

Vytatuas Olšauskas, a senior transportation specialist at Transekspedicija, said “bit by bit, taxes are being placed on businesses’ shoulders, and they will either transfer those costs to the consumer or will reduce the number of workers – who already tend to run from Lithuania.”

If the proposal were to be accepted, it would come into effect next year and provide the Competition Council with about €1 million more than it has received from the budget this year.

LRT