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EAPL is seeking to increase family incomes

The proposal to tax financial institutions’ and insurance companies’ properties (assets) has been made in Lithuania. Members of the Seimas faction of the Electoral Action of Poles in Lithuania (EAPL) have registered appropriate draft laws on taxation of financial institutions and Tax Law in the Lithuanian Seimas.

According to the law changes, assets of financial institutions exceeding the value of 100 million EUR and assets of insurance companies exceeding the value of 50 million EUR shall be taxed with a monthly tariff of 0.0334% or annual tariff of 0.4%. The taxable amount shall be reduced by the amount which the taxpayer has invested in securities of the Government of Lithuania and by the amount by which the taxpayer increased his/her own funds.

The initatiors of the amendments propose not to tax institutions and government agencies and local governments, which provide financial services anticipated in the provisions; the exception will also concern providers of postal services, including domestic and international transfers, as well as Bank of Lithuania, which provides financial services in accordance with the provisions in force in Lithuania.

According to the members of the EAPL Seimas faction, taxation of financial institutions and insurance companies would significantly increase the revenues to the budget and this in turn will enable the implementation of a number of social projects, including the ones prepared by EAPL. ‘Currently financial institutions and insurance companies pay income tax and capital gains tax, but the amounts are very little and disproportionate to generated profit. Quite often, these entities make such a distribution of profits that eventually nothing is left at all. This way large sector of services and financial transactions participates minimally in financing the expenses of the state budget,’ state the members of the Seimas from EAPL.

They provide data which shows that banks and branches of foreing banks operating in Lithuania earned 215.3 million EUR netto last year, but really insignificatnly contributed to the maintenance of the state. However, the value of assets of the banking system is estimated at 23.4 billion euros.

‘Financial institutions and banks functioning in Lithuania constantly increase payments for provided services, increase lending rates and their prices, restrict and tax the access of Lithuanian residents to their own money. Banks behave very irresponsibly seeking to increase their profits at the expense of Lithuanian residents, they do not take into account social justice and public interest. It is necessary to ensure that banks become major payers of taxes in Lithuania. Banks operating in Lithuania deliberately reduce profits, arrange mechanisms how to avoid paying taxes or how to pay as little as possible. Banks often in a hurry pour generated profit to the parent banks in their countries, take out loans there paying huge interests, etc.,’ state the authors of legislative initiatives.

According to the EAPL leader Valdemar Tomaševski, the aim of the amendments is to ensure additional incomes to the state budget, which would be directed to satisfy social needs (to pay monthly child benefit of 120 euros, to provide support for families with many children through the introduction of the Family Charter, to increase retirement pensions (connecting the basic retirement pension to the average salaries), and to satisfy other social needs). EAPL faction has registered appropriate amendments to the laws in the Lithuanian parliament.

EAPL made a proposal to pay a monthly allowance of 120 EUR after the birth of a first child if the income per family member did not exceed 153 EUR. After the birth of a second and subsequent child, the family income would not be taken into consideration and each child would be entitled to the amount of 120 EUR. Appropriate amendments to the Law on benefits for children have been registered by the EAPL members in the Seimas.

The EAPL faction has stressed, that similar tax for banks and financial institutions exists also in other European states and has already become a norm: it was introduced in the United Kingdom in 2011 , in Hungary – in 2010, in Portugal – in 2011, in France – in 2011, in Sweden – in 2008.

In the intervien with L24, chairman of the EAPL party Valdemar Tomaševski underlined, that in its electoral program EAPL included the proposal to tax the profits of banks and retail chains yet in 2012, but due to the lack of the political will of the ruling coalition it was not implemented.

EAPL stressed, that changes in regulations aim to increase family incomes, welfare of society and the citizens of Lithuania.

Zbignev Jedinskij, Vice Chairman of EAPL, will present the law to the Seimas on behalf of the EAPL faction.