Private Medicine Exempted from VAT

After unrelenting calls from LFMI to eliminate discrimination against private healthcare establishments, VAT charged on private healthcare services was abolished as of 2001, putting them on an equal footing with public services. In October 2000, VAT exemptions were granted only for medical services the prices of which did not exceed a government-established level. At that time LFMI submitted recommendations to the parliamentary Budget and Finance, Healthcare and Economic Committees to abolish VAT charged on private medical services and to create equal conditions for all medical institutions. The adoption of the final amendments was largely affected by LFMI’s analysis that revealed manipulation of EU directives by the Lithuanian authorities.

Income in Kind not to Be Taxed

In January LFMI analysed a proposal of the Finance Ministry to introduce accounting and taxation of income in kind and called upon the government to halt the adoption of the said proposal. LFMI indicated that the proposed rules were unjustified and would expand the tax base and discretionary powers of tax officers. In addition to that, they ran counter to the government’s programme. On 15 January, the government rejected the Finance Ministry’s proposal.

A Waste Tax Declined

On 15 January, the Government of Lithuania revoked its plans to introduce a new tax on glass and packet. LFMI came out in opposition to the proposed amendments to the law on pollution tax and called on the government to keep its election promise not to impose new taxes.

The parliament of Lithuania had already refused to approve a waste tax once. It was proposed back in February 2000. At that time LFMI submitted a policy paper to the parliament, arguing that a packet in itself was not a pollutant because its harmfulness depended solely on its further utilisation. Therefore taxation would only diminish incentives to develop waste disposal and processing activities. LFMI stressed that the new tax would increase the tax burden and aggravate business conditions, especially for companies that manufacture or use in their production glass and packets. The tax would also injure consumers by boosting the prices of goods as well as augment bureaucracy and administrative costs.