Lithuania's New Tax Strategies: A Look at Gambling Revenue Changes

Exploring VAT Adjustments, Wealth Taxes, and Annual Vehicle Levies

As Lithuanian politicians look for ways to raise revenue for the state budget, discussions at a recent governing coalition working group meeting centered on implementing a higher value added tax (VAT), a more progressive personal income tax, and an annual vehicle pollution tax.

Algirdas Sysas, chairman of the Seimas Committee on Budget and Finance, noted that these ideas remain under preliminary review. “These were discussions. We talked about increasing reduced VAT rates, and the conversation led us to ask the State Tax Inspectorate to calculate the figures. We also discussed taxing the wealthiest people through personal income tax,” stated Algirdas Sysas. He added, “I don't know what will come of it. But when it comes to GPM rates, Lithuania has the lowest rate for the wealthiest people in the European Union.”

However, other committee members expressed skepticism regarding the feasibility of these measures. Aušrinė Norkienė emphasized that no formal agreements had been finalized, stating, “We certainly discussed all the options, but there are no decisions.” Meanwhile, Tomas Tomilinas urged patience ahead of the coalition council's official presentation of findings, noting, “There are many alternative options.”

Debating Alternative Revenue Streams and Gambling Tax Increases

Beyond reviewing tax concessions and standard VAT structures—which currently stand at 21% and could yield significant revenue if altered—lawmakers revisited proposals concerning vehicle taxation and personal income tax brackets implemented following reforms under the government of Gintautas Paluckas.

Discussions also touched upon targeted fiscal adjustments, such as increasing taxes on gambling. Tomas Tomilinas highlighted that an agreement has already been reached on his proposal to apply progressive rates to lotteries and gambling, which is expected to generate approximately €36m in revenue. “Having them take effect after six months is non-negotiable. We are talking about the three-year budget and its needs. Nobody is focused on this year's deficit. Everyone understands that there is a war, spending and indexation. We are all concerned about the country's long-term stability,” explained Tomas Tomilinas.

Echoing the cautious approach, Aušrinė Norkienė reiterated the collaborative nature of the talks: “We are discussing everything from A to Z. Our goal is to bring proposals to the budget that will allow the coalition groups to reach a consensus and vote in favour of it.” With the National Audit Office projecting public sector deficits that could approach 6% of GDP by 2029, Algirdas Sysas stressed the necessity of structural alignment: “Taxes such as those in the EU. At least we should aim to align ourselves with them, rather than talking about someone wanting to rob someone else. We cannot just keep borrowing.” The coalition council is scheduled to meet on Wednesday to review the working group's final findings.