The Secret tax plan: good news for low-income workers

Checking for money
Reuters / Scanpix

The Government lead by Prime Minister Saulius Skvernelis after months of preparing the new tax reform, finally presented the before mentioned reform before the representatives of the Peasant and Green Union, as well as the representatives of the social democrat fraction in Parliament, on Wednesday.

According to, DELFI sources the Prime Minister promised not only that no new taxed will be implemented until 2019, but also that about 0.5 billion euros will be set aside for the reduction of poverty and social exclusion in the state.

Furthermore, as stated by Prime Minister S. Svernelis changes to the taxes will be made in 2018, at the same time with the annual budged, which will come into effect from the 1st of January, 2018.

What is planned:

For the tax-exempt income (NDP) which currently reaches 310 euros to be aligned in equilibrium with the minimum monthly salary and reach 380 euros.

To reduce the contributions made to “Sodra” for low-income workers, as for their income a 100 euro exemption should be valid. In other words the contribution to “Sodra” should be paid not from the minimum wage of 380 euros but from 280 euros.

All families will be issued grants for children: 30 euros for the first and second children up to 18 years of age, while 75 euros will be given from a third children and any other children after that.

Small and medium sized businesses will be taxed progressively. Thus, for up to 10 thousand euros in profit a – 5pct. tax rate, the tax rate for up to 30 thousand euros will slowly increase, and 15 pct. will be given for business with from 30 thousand euros in profit.

Furthermore, an interest in the removal of business licenses for construction and auto-repair services is expressed, as well as the transition to progressive taxation.

It is proposed to remove preferences given for the agricultural sector, as an interest in maintaining a small excise duty for diesel fuel is expressed which should be levelled at the current duty level in Poland.

Furthermore, an interest regarding the removal of the valued added tax (PVM) for hotels, which is currently at 9 pct. PVM is expressed. Since the regular rate is 21 pct.

A proposal is given regarding the introduction of a progressive tax on real estate firms is highlighted, by which if the worth of it reaches up to 220 thousand euros the tax will be zero, but if this limit is exceeded there would be 0.5 pct. to 3 pct. tax issued.

Prime Minister S. Skvernelis also issued a promise to merge the contribution made by both the employer and employee to “Sodra“.

Currently, a worker working on under an employment contract has his salary in total taxed with a tariff up to 55.8 pct. which is made up from a 15 pct. income tax, 6 pct. health insurance fee, 3 pct. contribution to pension and social security insurance, as well as 31.18 pct. of the workers wage being paid by the employer to “Sodra”.

Thus, the 31.18 pct. part should be given to the worker, as according to the original idea proposed this value would automatically increase the wages of the workers “on paper”.

“These are suggestion up for discussion which will officially start on Friday when we shall invite both people and interested structures and institutions to talk and discuss on the matter at hand. This, will not be a situation in which we say something and that is what will happen” – stated S. Skvernelis after the meeting.

Moreover, when asked if the proposal received much criticism in the fraction, the Prime Minister stated that many different opinion on the matter at hand were received.

“First of all, the first pinion given by anyone is based on the fact what the said person did before entering the Parliament, what kind of work or activities the said member carried out” – the Prime Minister stated, in part alluding to the proposals of the Peasants in regards to removing some tax breaks.

About Egle Samoskaite 31 Articles
Rašau vidaus ir užsienio politikos temomis. Domiuosi darbo santykių reforma Lietuvoje, procesais politinių partijų viduje. Užsienio politikos srityje rašau apie santykius su Rusija ir JAV, taip pat Vidurio Rytus, ypač daug dėmesio skiriu politiniams procesams Turkijoje. Labai domiuosi musulmonų bendruomenių gyvenimu Europoje. Vilniaus universitete esu baigusi Tarptautinių santykių ir politikos mokslų institutą, žurnalistinę karjerą pradėjau naujienų agentūroje BNS.
You may like

Be the first to comment

Leave a Reply

Your email address will not be published.