VILNIUS, July 25 (Xinhua) -- Tackling poverty and social exclusion, helping families, and encouraging businesses are among the main goals of the tax and social security reform planned by the Lithuanian government, finance minister Vilius Sapoka said on Tuesday.
"The goals are all the same, we are debating the measures to achieve them," Sapoka noted, referring to the government's initial proposals announced last month.
The cabinet plans to present the plan as soon as next week. "I can assure that the package of reforms will be better than the initial (June) proposals," Sapoka was quoted as saying by local media.
The tax reform plan includes a proposal to increase the maximum monthly tax-exempt income amount from the current 310 euros to 380 euros, equaling it to a minimum wage, he said.
The government pledges to restore the reduced VAT for heating which was abolished earlier this year. However, Sapoka did not elaborate on the exact tax rate. Before it was removed, the reduced VAT for heating amounted to 9 percent, while general VAT in Lithuania is 21 percent.
Lithuania has a long heating season every year. As such, the taxation of heating services is among the most vulnerable issues. President Dalia Grybauskaite criticized the removal of the reduced VAT tax in June, saying this would further deepen poverty.
Sapoka said the government was not planning to implement new taxes next year and intended to allocate 500 million euros for reducing social exclusion. These funds should be accumulated through the tax reforms, combined with reduced spending and the benefits from the growing economy, the minister added.
The tax system and social security reform plan will be subject to discussions in parliament and is expected to be approved later this fall. Enditem
