Lithuanian government considers more tax breaks for low-earners

“We are planning to have tax-exempt income at about €310, with possibly additional €200 per each child,” Prime Minister Algirdas Butkevičius said on LRT Radio on Tuesday.

The government last raised tax-exempt income this January from €166 to €200. Parents with children can deduct €120 per child from their taxable income, twice more than before.

Butkevičius said the measure was intended to raise disposable income for low-earners.

He said the government was also considering VAT exemptions for staple foods.

The €200 deduction from taxable income applies to workers making the minimum wage, €350 a month before tax. It gradually decreases for higher-earning groups and does not apply to anyone making over €928 a month.

The tax deduction for parents applies to everyone without exception.

Liberal MPs have drafted a bill suggesting to raise the tax-exempt income level to the minimum wage.