VILNIUS, Aug. 3 (Xinhua) -- Lithuania's tax reform would be meaningful only if it ensures tax environment which encourages social justice and economic growth, the Baltic country's President Dalia Grybauskaite said on Thursday.
She was commenting on the government's updated proposals on tax changes which were presented by Prime Minister Saulius Skvernelis.
"It is important to find a balance between the goals declared by the government and financial abilities of the country," Grybauskaite was quoted as saying in her remarks emailed to local website Delfi.lt.
"However, we can see that, according to the government's proposals, heating prices would still go up and the ceiling for contributions to the State Social Insurance Fund seems like a 'gift' to very high earners," the head of state added.
In her words, the whole upcoming tax reform will be evaluated later when it is laid out in a draft law.
The Lithuanian government abolished the reduced VAT for heating earlier this year, however, later pledged to restore it. Lithuania has a long heating season every year. As such, the taxation of heating services is among the most vulnerable issues.
Meanwhile, Prime Minister Skvernelis noted in a press conference held earlier on Thursday that the current tax reform proposals are not final as they will be further discussed at the parliament.
Among other proposals, the government intends to introduce new reduced 15 percent VAT for heating as of the beginning of next year.
Before it was removed, the reduced VAT for heating amounted to 9 percent, while general VAT in Lithuania is 21 percent.
The new 15 percent reduced VAT would be also applied to hotel and accommodation services.
The current Lithuanian government started its work in December last year and pledged to rearrange the tax system in order to reduce income inequality, social exclusion and poverty.
