The amendment to the Law on VAT passed the first reading in the Seimas with 94 votes in favor, three against and another three 34 abstentions.
The parliament will discuss the amendment under a fast-track procedure, with a final vote set for Sept. 19. The government is set to lose 11 million euros in budget revenue this year due to the VAT rate cut.
The government has earlier proposed to introduce a new 15 percent VAT rate starting next January and to apply it to district heating starting next January. This proposal will be tabled to the parliament along with next year’s budget bill.
The VAT rate on district heating and hot water services was raised from 9 percent to the standard 21 percent in early June.
The Lithuanian Farmers and Greens Union in early July signed a deal with the Homeland Union–Lithuanian Christian Democrats under which the ruling party pledged to bring back the reduced VAT rate on heating in exchange for the opposition party’s votes in favor of a state forest management reform.