Lithuanian parliament sends budget bill back to government for improvement

The second hearing has been scheduled for 2 December. The bill should be passed at the following plenary sitting.

When making corrections to the bill, the government will have to consider the agreements of the ruling majority on the scrapping of the reduced 9 percent VAT rate on heating from July and on the raising of minimum wages to 325 euros a month.

The budget next year is expected to generate extra revenue from dividend from state-owned companies (LTL 195m, EUR 56.5m), from excise duties levied on alcohol and tobacco (LTL 25m), as well as from lottery and gambling tax (LTL 4m).

Moreover, the Budget and Finance Committee has proposed to reduce the administration expenditures of state-financed institutions by 10 percent next year, instead of 5 percent proposed by the government.

Next year, appropriations for national defense will increase by one-third to 424.5 million euros and will account for 1.11 percent of projected GDP. Lithuania plans to reach the 2-percent ratio established by NATO by 2020.

According to the budget bill, consolidated revenue of the central government and local governments (including 2.321 billion euros in EU and other international aid) should reach 9.215 billion euros in 2015, which is 5.9 percent above the revenue target set for 2014.

Consolidated budget expenditure, including EU support funds, is planned to reach 9.557 billion euros.