Property tax proposed

VILNIUS — Property owners in Lithuania may soon be expected to prop up the budget with a new property tax being suggested by the prime minister.

Prime Minister Andrius Kubilius has set his government the lofty goal of gaining eurozone accession by 2014, a feat which requires a government budget deficit of 3 percent or less. This year’s budget deficit will run at about [private_supervisor]8.1 percent, the government predicts.

Under finance ministry proposals, the new real estate tax will be set at between 0.3 and 1 percent of the value of the property.

Kubilius said on radio that the tax was just and that it is the appropriate time to introduce it. He argues that richer people have an obligation to contribute more to the budget.

There are various models that the government are considering, some which tax commercial or leased property only and some that tax all property.

The government is in desperate need of increased revenue. Over 2009 it increased value added tax, personal income tax and business tax to 21 percent each, but it still needs to cut expenditures and fill its coffers to make ends meet.

On Monday, the Minister of Finance Ingrida Šimonytė told media that public institutions have optimistically tendered inflated budgets, which would see a budget deficit blowout of around 20 percent.

“Institutions feeling spring in the air are increasing their budgets by 4 billion litai (€1.16 billion) more than this year. If we granted these wishes, the budget deficit would reach double digits,” Šimonytė told journalists on Monday.

The finance minister said that if there had been a fiscal discipline law established in 2004 instead of 2007, then the country would have easily ridden out the storm throughout the crisis.

Estonia, being far more prudent over the last few years managed to store a surplus that it used to survive the economic crisis. Neither Lithuania nor Latvia were as well-organized with their finances, both running perpetual budget deficits. [/private_supervisor] [private_subscription 1 month]8.1 percent, the government predicts.

Under finance ministry proposals, the new real estate tax will be set at between 0.3 and 1 percent of the value of the property.

Kubilius said on radio that the tax was just and that it is the appropriate time to introduce it. He argues that richer people have an obligation to contribute more to the budget.

There are various models that the government are considering, some which tax commercial or leased property only and some that tax all property.

The government is in desperate need of increased revenue. Over 2009 it increased value added tax, personal income tax and business tax to 21 percent each, but it still needs to cut expenditures and fill its coffers to make ends meet.

On Monday, the Minister of Finance Ingrida Šimonytė told media that public institutions have optimistically tendered inflated budgets, which would see a budget deficit blowout of around 20 percent.

“Institutions feeling spring in the air are increasing their budgets by 4 billion litai (€1.16 billion) more than this year. If we granted these wishes, the budget deficit would reach double digits,” Šimonytė told journalists on Monday.

The finance minister said that if there had been a fiscal discipline law established in 2004 instead of 2007, then the country would have easily ridden out the storm throughout the crisis.

Estonia, being far more prudent over the last few years managed to store a surplus that it used to survive the economic crisis. Neither Lithuania nor Latvia were as well-organized with their finances, both running perpetual budget deficits. [/private_subscription 1 month] [private_subscription 4 months]8.1 percent, the government predicts.

Under finance ministry proposals, the new real estate tax will be set at between 0.3 and 1 percent of the value of the property.

Kubilius said on radio that the tax was just and that it is the appropriate time to introduce it. He argues that richer people have an obligation to contribute more to the budget.

There are various models that the government are considering, some which tax commercial or leased property only and some that tax all property.

The government is in desperate need of increased revenue. Over 2009 it increased value added tax, personal income tax and business tax to 21 percent each, but it still needs to cut expenditures and fill its coffers to make ends meet.

On Monday, the Minister of Finance Ingrida Šimonytė told media that public institutions have optimistically tendered inflated budgets, which would see a budget deficit blowout of around 20 percent.

“Institutions feeling spring in the air are increasing their budgets by 4 billion litai (€1.16 billion) more than this year. If we granted these wishes, the budget deficit would reach double digits,” Šimonytė told journalists on Monday.

The finance minister said that if there had been a fiscal discipline law established in 2004 instead of 2007, then the country would have easily ridden out the storm throughout the crisis.

Estonia, being far more prudent over the last few years managed to store a surplus that it used to survive the economic crisis. Neither Lithuania nor Latvia were as well-organized with their finances, both running perpetual budget deficits. [/private_subscription 4 months] [private_subscription 1 year]8.1 percent, the government predicts.

Under finance ministry proposals, the new real estate tax will be set at between 0.3 and 1 percent of the value of the property.

Kubilius said on radio that the tax was just and that it is the appropriate time to introduce it. He argues that richer people have an obligation to contribute more to the budget.

There are various models that the government are considering, some which tax commercial or leased property only and some that tax all property.

The government is in desperate need of increased revenue. Over 2009 it increased value added tax, personal income tax and business tax to 21 percent each, but it still needs to cut expenditures and fill its coffers to make ends meet.

On Monday, the Minister of Finance Ingrida Šimonytė told media that public institutions have optimistically tendered inflated budgets, which would see a budget deficit blowout of around 20 percent.

“Institutions feeling spring in the air are increasing their budgets by 4 billion litai (€1.16 billion) more than this year. If we granted these wishes, the budget deficit would reach double digits,” Šimonytė told journalists on Monday.

The finance minister said that if there had been a fiscal discipline law established in 2004 instead of 2007, then the country would have easily ridden out the storm throughout the crisis.

Estonia, being far more prudent over the last few years managed to store a surplus that it used to survive the economic crisis. Neither Lithuania nor Latvia were as well-organized with their finances, both running perpetual budget deficits. [/private_subscription 1 year]

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