Economists critical of “Peasant” tax reform proposals

The Peasant and Greens Union promises a tax reform. It promises much on paper, but according to some economists, lacks specifics. Prime Minister candidate Saulius Skvernelis has announced that private income tax would rise almost twice, from 15 to 29%, but “Peasant” leader Ramūnas Karbauskis is not inclined to indicate specific numbers yet.

Having taken power, the “Peasants” pledge that the tax reform will benefit those earning up to 1000 euro a month. Saulius Skvernelis has announced that private income tax would rise almost twice, from 15 to 29%. That said the tax burden is apparently not going to increase because the income tax will incorporate health insurance and social security payments as well. This way, the representatives of the new government say, wages for those earning under 1000 euro should rise somewhat. Those who earn more would see a smaller pay rise. Some economists note, however, that the wage rise would only be visual, “on paper”, with no real change actually taking place. 29% taxation would apparently only be for dividends and income from individual business activity.

Labour unions indicate they would support the proposed changes. Apparently the current system is prone to abuse, while tax income should rise after the reform. Business associations also support the move to merge employee and employer payments to Sodra [social security] and making it a part of the wage.