European Commission criticises lack of progress on tax, labour, education reforms in Lithuania

“Limited progress has been made in undertaking a comprehensive pension reform to address the sustainability of the pension system. Some steps have been taken to increase the labour market relevance of education, but progress has been limited to better attainment of basic skills,” the Commission report said.

The Commission also said Lithuania’s government had made limited progress in reforming its tax systems, in improving its healthcare system and in tackling skills shortages in its labour market.

“Some progress was made to reduce the relatively high taxes for low-income earners, but limited efforts have been made to shift taxation towards more growth-friendly taxes. However, some measures have been taken to improve tax compliance,” it said in its Country Report Lithuania 2016.

Overall, the European Commission said Lithuania had made limited progress in addressing the recommendations issued by the European Commission for the country last autumn.

On social protection and labour market policy, including the coverage and adequacy of unemployment benefits and cash social assistance, the Commission said while a number of measures were under consideration by the government, progress had been limited as the reforms were being debated by parliament and had not yet been adopted.

The Commission praised Lithuania’s progress in reaching its national targets on reducing greenhouse gas emissions, increases in renewable energy and in energy efficiency. It also said Lithuania was making real progress on third level educational attainment, on tackling early school leaving and on reducing poverty.

The government needed to put more effort into increasing R&D investment, increasing the employment rate, and raising the level of renewable energy in transport, said the Commission.

A broad-based strengthening of investment in education was needed to improve Lithuania’s human capital and counteract its shrinking working age population, it said.