During the presidential debate held on Monday, there was no lack of criticism of the Government regarding this unfulfilled reform of the NT. Dainius Žalimas, the candidate nominated by the ruling Freedom Party, expressed this position, emphasizing that the proposed tax would have been too regressive.
Self-nominated presidential candidate Eduardas Vaitkus claimed that he not only disagrees with the universal real estate tax, but also believes that the tax system is already wrong. According to him, taxes in Lithuania need to be reduced, not increased.
“I would not agree at all. No new taxes can be introduced. (…) Let’s think maybe then about why the VAT tax is for medicines. Why is a sick person punished by 21 percent? tax,” explained the presidential candidate.
“It is necessary to reduce the value added tax on food products to 0 percent. or as much as the European Union will allow,” he added.
He was seconded by Giedrimas Jeglinskas, who is nominated for the presidency of the Democratic Union “Vardan Lietuvos”, arguing that the introduction of such a tax would only contribute to the increase in the level of poverty. He claimed that the poverty level in Lithuania is growing and has currently reached 6%.
“There can be no property tax. We are not at such a level of economic development of the country to have such a tax. We should also look at the general tax reform and what we are trying to achieve”, said G. Jeglinskas.
“We have to think about redistribution. Absolute poverty reaches 6 percent. There is no welfare state in sight, and it would be absurd to invest in real estate tax even now, which would make it difficult for people,” the candidate asserted.
According to G. Nausėda, it is necessary to talk about the entire tax system
At that time, Gitanas Nausėda, who was running for a second term, says that it is impossible to talk only about real estate. According to him, the entire tax system needs to be discussed. However, in the head of the country’s opinion, the model previously proposed by the current government is not suitable for the transformation of the tax system due to its regressivity.
“It really cannot be, as suggested in the context of the tax reform, that the residents of smaller cities pay, while the residents of large cities pay less due to the adjusted median,” explained G. Nausėda.
The President also criticized the Government, which chose to carry out the reform of the NT in order to receive funds from the Economic Recovery and Resilience Building Plan (RRF).
“The government backed itself into a corner when it listed the introduction of property tax and its principle of universality as one of the ways to get RRF money,” he said.
The current president also criticized the other candidates, saying that they propose to increase state spending, but to reduce taxes and thus the country’s income by war.
A part of the candidates believe that persons renting real estate could be additionally taxed
Remigijus Žemaitaitis, the presidential candidate of the “Nemunos Aušra” Party, also criticized the government’s decisions on real estate, stressing that no European Union institution demanded the implementation of real estate reform in Lithuania in order to receive RRF funds. However, according to him, taxation could be considered for persons who rent out their real estate.
“I want to point out that no institution demanded the distribution of real estate tax. The government itself proposed to consider it,” explained the candidate.
“Of course, we need to consult with the social partners here as well. But if a person has 3 flats and rents 2, we can talk about a symbolic real estate tax. But as the situation is today, there is no need for a general tax,” he emphasized.
Andrius Mazuronis, the presidential candidate nominated by the Labor Party, also supports this idea.
“What can be discussed is that if a natural person uses it for some kind of commercial activity and has bought 5-10 houses and receives income. Then some kind of real estate tax must appear,” said the candidate.
The candidate also criticized the median system proposed by the Government, as its implementation would mean that luxury property in big cities would not be taxed.
In response to such criticism, the Libertarian candidate emphasized that the party he represented did not support such a reform of the NT.
D. Žalimas: The government’s reform was indeed the opposite
Dainius Žalim, nominated by the Freedom Party, believes that the government’s attempted reform failed due to its regressivity. He also emphasizes that currently the real estate tax would not have a significant impact on the Lithuanian economy, as the society has not yet become rich.
“Indeed, when a lot of people talked about the reform proposed by the Government, it was so opposite, reducing progressivity. And I think that this is one of the reasons why it failed”, explained D. Žalimas.
“It is necessary to realize that in the future, as society becomes richer, the tax base will also appear. When, I couldn’t say now,” he emphasized.
I. Vēgėlė claims that taxing the first home would be a mistake
Self-nominated presidential candidate Ignas Vēgėlė asserted that no real estate tax should exist, as a person should not pay for the property he bought. He also points out that some wealth is taxed through wealth taxes.
“NT is personal property. That is, if a person buys property, he should not pay for it. Of course there are taxes on expensive assets, and those who have them can pay. But taxing the first home would be the biggest mistake,” he asserted.
I. Šimonytė, who did not participate in the debate, also spoke
Although Prime Minister I. Šimonytė did not participate in these presidential debates due to the visit, she shared a video on the social network. The Prime Minister claimed that certain changes in the tax system are necessary for loans granted by the state. According to her, it is disappointing that the tax system has not yet been reformed.
“We just need to agree on the size of the state we want, the size of the commitments that seem optimal to us, how generously we agree to redistribute what we create in order to fulfill the obligations of education, social security, health infrastructure, and of course national defense, which is probably the most important task for all of us right now. And after that decision, we need to find a way to distribute the tax burden correctly”, explained I. Šimonytė.
“It is disappointing that the Seimas has so far failed to correct the imperfections of the tax system, which are obvious and glaring, but I have no doubts that sooner or later, perhaps with the support of the President, these decisions will be made,” she added.
