It is tax increase for middle class – MP on lifting VAT exemption on heating

“The Social Democrats once again have showed that they represent big capital interests. Increases of tax for the middle class are planned, next to that, a new tax concession for hotels is underway. The Social Democrats claim that VAT exemption on heating is abused by the “rich ones” but why the concessions to medicines, public transport and others are kept, while they are also used by those that do not really need them? Normally a family of two adults and two children that lives in a standard apartment has total income of LTL 3,000-5,000 (EUR 870-1,500), or two pensioners whose income is around LTL 1,500 (EUR 430). Which ones of those are the so called “rich ones”? Wealthy citizens, on the opposite, live in private houses and do not use central heating,” he said.

According to MP Masiulis, a new concession for business is created from the bigger money received from central heating users.

VAT from 2015 will go down from 21 percent to 9 percent to businesses engaged in accommodation services.

The Law on Value Added Tax stipulates that the reduced 9 percent VAT rate on heating and hot water is in force until 31 December 2014. The Cabinet recently decided to lift the exemption.