The Ministry of Finance have submitted the 2010 draft national budget to the Government on 13 October.  It is expected that the central government budget deficit will reach 5.579 b Litas (1.62 b EUR), or 6.7 percent of GDP.

According to the proposal the revenues of the central Government budget (excluding the EU assistance funds) would total 13.017 billion (b) Litas and would be 1.38 billion Litas smaller than in 2009.  The expenditures should reach 18.596 b Litas and should be 622.7 million Litas lower than in 2009.

The Ministry of Finance reported that with the EU funds included, the budget revenues will reach 20.909 b Litas, and the expenditures will be 26.488 b Litas.

The revenues of the national budget, which includes the central Government and municipal budgets, will total 16.091 b Litas (excluding the EU assistance) and will be 2.105 bLitas lower compared with the revenues planned for 2009. Expenditures are projected to reach 21.67 b Litas in 2010 (1.347 b Litas less than in this year).

With the assistance funds of the EU and other international donors included, the revenues of the budget will reach 23.982 b Litas, while the allocations will run at 29.562 b Litas in 2010.

According to the draft the allocations to institutions financed from the budget may be reduced by almost 25 percent, (even though the Minster of Finance wanted it to be 50 percent) and the wages fund alone may be cut by 10 percent.

The biggest changes will be in the lowering of the corporate profit tax rate to 15 percent, from 20 percent and to 7.5 percent to the micro companies.

The revenues on the income tax are predicted to reduce by 24 percent in next year in comprising to 2009. Revenues on other main taxes will shrink by 2.5-3.7 percent.

The Government is not planning to excise duties who suppose to reach 3.187 b Litas n 2010 which will stand for 24.5 percent of the total revenue figure, 2.5 percent lower compared with 2009.

Value added tax is calculated to be the largest revenue source of the central Government budget, accounting for some 46.2 percent of total revenues. According to the draft, the revenues on VAT will be 3.7 percent less compared with the amount planned for this year.

National budget revenues from the income tax will decline by 24 percent in 2010, compared with 2009, to reach 3.309 b Litas or 20.6 percent of the total revenue figure.

Lithuania’s public sector wages fund is suggested to be cut by 10 percent or 826 million Litas (239.4 EUR mln) next year, compared with the initial plan that kept the fund at the current level.

In 2010 the expenditures from the central Government budget (excluding the EU funds) will increase only in three areas.  That is to co-finance of the projects co-funded by the EU (1.179 b Litas, up by LTL 521 million), for the payments into the Patients’ Funds (1.909 b Litas, up by 337 million Litas), and debt servicing (1.692 b Litas, up to 689 million Litas).

(EUR 1 = 3.45 Litas)