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Lithuania must implement deep tax reforms: EU Commissioner

Xinhua, May 20, 2016 Adjust font size:

Lithuania must implement deep tax system reforms in order to reduce the tax burden on low-income earners by shifting the burden to other sources, European Commissioner Vytenis Povilas Andriukaitis said on Friday.

Andriukaitis, European Commissioner responsible for health and food safety, paid a visit to Vilnius in order to present the newest Commission's recommendations on the national reform and stability programme.

"It should be a long-term review of tax system based on a broad national agreement involving all social partners," Andriukaitis was quoted as saying by ELTA news agency while speaking during joint press conference with Algirdas Butkevicius, Lithuania's prime minister.

According to Andriukaitis, Lithuania's head of government "understands that it is an issue on a longer-term political agenda in the country".

The Commissioner pointed out poor health outcomes in Lithuania and the highest mortality rate in the EU among people of working age between 20 to 64 which is having a big impact on the potential available workforce and labour productivity.

Butkevicius agreed that decreasing number of working age people is the key challenge for the Baltic country.

"It needs to be addressed urgently in order to avoid economic and social problems in the future," said Butkevicius.

Lithuania's prime minister noted that it is planned to increase non-taxable income amount next year.

"The amount will be significantly increased from 300 to 310 euro (per month)," said Butkevicius.

He also underlined that medical nurses and doctors' salaries should be increased as of July this year.

The prime minister also noted the importance of the new social model for the reduced social exclusion and actual rise in earnings.

"In order to respond to the challenges of the aging population and immigration, a strong focus is made on the effective use of the existing national human potential," Butkevicius said.

European Commission announced recommendations for the EU member states earlier this week, underlining the demographic issues as the most challenging for Lithuania. Endit