In an upbeat assessment about Lithuanian macroeconomic conditions, the EU Commissioner for Taxation, Customs Union, Audit and Anti-Fraud, Algirdas Semeta, commented that not only the country had avoided macroeconomic imbalance procedures applied to 12 Member States but that “it is possible to state that Lithuania has been successful enough in dealing with the macroeconomic situation… Lithuania looks well enough in the general context. The growth rate projected for Lithuania this year will be the second largest [in the EU] after Poland. Public finances are improving gradually”.
This does not mean that the nation should rest on its laurels, since according to the commissioner, Vilnius should continue increasing the state revenues, consolidating its public finances, whilst prompting the Kubilius administration to introduce a car tax, amongst other taxation instruments. Such advice comes amidst the commissioner’s concerns regarding Lithuania’s “shadow” economy; one of the largest across the EU.
Expanding on his fiscal efficient views, Semeta added that “Lithuania’s public expenditures are third smallest across the EU. It is very important to direct those funds towards productive investments, in particular towards education, science, innovations, energy efficiency. The tax burden is one of the smallest in the EU. Here are the possibilities to look for reserves,” whilst dismissing the fact that both Lithuania and Estonia stand amongst the only EU Member States to lack any type of car taxes as well as having the lowest transport rates in the EU.
The EC issued specific recommendations on tax collection to 25 EU Member States, including Lithuania. On this point, Commissioner Semeta concluded that “the Commission advises to Lithuania to tackle high unemployment through the amendments to its labor legislation. Speaking about social exclusion, the Commission advises to eliminate incentives not to work,” whilst urging the public administration to index pensions and to couple the pension age with life expectancy.
Nonetheless, the commissioner admitted that Lithuania’s possibilities to further reduced expenditures were “rather limited”.
On Wednesday, the EC issued its annual report card about the country’s economic convergence and reform programme, stating that unemployment and social exclusion remain high in Lithuania.