“Let’s not forget that the EU’s structural support will be cut after 2020. This alone will force Lithuania to review its tax policy. We won’t be able to serve our national interests without increasing the share of GDP redistributed via the government budget. The share that Lithuania currently redistributes is among the lowest in the union,” Andriukaitis, a social democrat, said in an interview with the Lietuvos Rytas daily.
Andriukaitis, who is the European Commissioner in charge of health and food safety, noted that the European Commission had said Lithuania needed to expand its tax base which was over-reliant on labour and consumption levies.
He said Lithuanian society needs to start a discussion on tax reform, including the possibility of introducing progressive taxation, otherwise the government will be hard-pressed to finance public services like healthcare, education, research, and culture.
“In Lithuania, we have extreme gaps between highest-earners and lowest-earners,” Andriukaitis said.
“The social democrats must first decide on their social policy encompassing all areas: free higher education, free healthcare in life-threatening cases, protecting the individual from being pressured by their employer, finally, a fairer taxation policy,” Andriukaitis said.
The biggest challenge, however, he said was the “tragic” demographic situation in the country. Negative natural growth and massive emigration has bled the country’s population at unsustainable rates.
“What are we to do? Shouldn’t we take care of young families? They need decent wages, housing loans, schools, kindergartens. These are social goods that cannot be produced without expanding the government budget,” Andriukaitis said. “If politicians do not get that, I wonder if they’re in their right place.”