Free Market for Lithuania's Prosperity
Programme
Goal
To spread the ideas of economic liberalism, based on the principles of individual freedom and responsibility, free market and limited government. LFMI pursues this goal by generating ideas and presenting free market solutions by innovative and effective means to all levels of government and the public.
Policy Research and Advocacy
I. Business Deregulation
Our goal is to help create favourable conditions for private business activity, to expand freedom of action and competition, to abolish barriers to market entry and operational business constraints, and to limit state intervention in economic affairs.
All types of businesses have the right to equal business conditions; therefore, LFMI seeks to minimise state involvement in economic activities by
- reducing the number of controlling institutions,
- abolishing state monopolies,
- limiting government borrowing,
- abolishing state investment, subsidies and compensations,
- eliminating business aid programmes.
The discretionary rights of government executives to determine what business activities are permitted and what are prohibited, and what conditions are allowed and what are forbidden, undermine free enterprise and inhibit business growth. LFMI seeks a reduction in the level of official discretion as well as the abolition or simplification of various bureaucratic procedures, including:
- the labelling of goods,
- licenses (and requirements to obtain a license),
- certification of goods and services.
Employers and employees should have the right to freely decide on the terms of employment, and the labour force should enjoy free and unrestricted movement. LFMI promotes freedom of contract and the abolition of unjustified employment regulations by
- eliminating mandatory labour contracts,
- repealing mandatory working positions,
- simplifying requirements for hiring labour,
- eliminating mandatory accounting of working hours,
- abolishing the mandatory minimum wage,
- repealing mandatory compensations,
- abolishing the privileges of trade unions.
People should have conditions to devote more of their time and energy to business activities rather than government-mandated paperwork. LFMI seeks the simplification of mandatory reporting and accountability requirements by
- revoking compulsory reporting to the Department of Statistics,
- abolishing mandatory tax returns to the Tax Inspectorate,
- eliminating mandatory reports to the State Social Insurance Board on hired and dismissed employees,
- simplifying customs declarations,
- eliminating special accounting documents,
- eliminating mandatory bills of lading.
II. Taxes and State Budget
The goal is to lift and even out the tax burden, to minimise its destructive effects on market processes, and to reduce administrative costs.
Creativity, initiative and success should not be punished, so taxes should have the least negative effects on efficient allocation of resources and wealth creation. LFMI promotes the replacement of direct income taxes with a more neutral and effective tax by:
- removing corporate income tax,
- removing personal income tax,
- switching to a tax based on VAT principles and eliminating existing tax breaks and exemptions.
In order to facilitate the acquisition, building and maintenance of residential facilities and to protect people from being taxed on their private property, LFMI calls for:
- halting the introduction of the real estate tax for individuals,
- repealing the real estate tax charged on companies and organisations.
Businesses should have conditions for optimal use of resources in their business activities without being forced to set capital aside for government-dictated purposes. LFMI seeks to minimise and simplify the application of excise taxes, the immediate tasks being:
- to abolish advance payment on excise duties;
- to abolish excise duties on goods that are exempted from this tax in the EU.
Companies should pay the government for services they receive rather than for permissions to operate. LFMI seeks to simplify the calculation and payment of stamp duties so that:
- the size of stamp duties would reflect the costs of government services,
- stamp duties would not be used as a tool for restricting competition.
The size of the road tax should reflect the actual use of roads, therefore LFMI proposes:
- revoking the calculation of the road tax based on a company's turnover;
- forming the road fund from annual transport registration fees and revenues from excise duties on fuel.
The state budget and tax administration should be transparent, effective and rational. Also, conditions should be created for the reduction of the tax burden. To achieve this, LFMI calls for a fundamental reform of the formation and execution of the state budget by:
- reducing government functions;
- creating a consolidated state budget;
- reducing state debt;
- forming minimal annual budgets;
- effectively allocating revenues from privatisation.
III. Financial Infrastructure
Our goal is to expand private financial infrastructure and to promote transparent and effective allocation of resources.
In order to enhance conditions for the value of shares to grow and for free movement of capital, LFMI advocates:
- privatisation of state property and the improvement of privatisation rules and procedures,
- privatisation of state property on the stock exchange through the public sale of shares,
- extensive involvement of capital market participants in the privatisation process,
- the creation of favourable conditions for the establishment and operation of private pension funds.
IV. Monetary Policy and Banking
We aim to promote a transparent, reliable and rule-bound monetary policy protected from political pressure and private interests.
We seek:
- to preserve the currency board system and to ensure that the reserve currency is suitable for the largest possible part of society;
- to ensure that the Bank of Lithuania does not finance budgetary and private structures,
- to accelerate privatisation of state-owned commercial banks;
- to enhance competition in the banking sector;
- to introduce voluntary deposit insurance.
V. Social Security
The goal is to promote an effective social security system based on the principles of private insurance.
Conditions should exist for private retirement provision, and state support should be limited to those segments of society that are unable to provide for themselves. LFMI thus advocates:
- a transition to private pension insurance,
- the abolition of state pensions and other social privileges;
- the application of a ceiling on social security contributions;
- the consolidation of state and social insurance budgets.
VI. International Trade
Our goal is to expand freedom of trade and thus freedom of choice and prosperity.
Individuals and companies should be free to buy on the cheapest and to sell on the dearest markets. To achieve that, LFMI advocates:
- a stable, transparent and predictable foreign trade policy;
- the abolition of tariff and non-tariff barriers;
- the simplification of customs procedures;
- Lithuania's membership in the World Trade Organisation.
VII. EU Integration
The goal is to ensure that Lithuania's integration into the European Union produces the greatest possible benefits for the people of Lithuania.
LFMI promotes a consistent, structured approach to integration-related economic policy issues, seeking:
- to ensure timely and well-considered policy changes related to EU integration;
- to reduce the negative effects of integration-related regulatory changes;
- to reduce the costs of adopting the EU acquis.
VIII. Corruption
Our goal is to introduce an effective approach to the fight against corruption, aimed at removing the conditions that allow for the abuse of official power.
In order to help eliminate the roots of corruption, LFMI calls for:
- reducing the functions and powers of state institutions;
- minimising officials' discretion in adopting and enforcing decisions;
- increasing accountability, responsibility and transparency of state authorities;
- simplifying administrative rules and procedures.
IX. Agriculture
Our goal is to promote liberalisation of agriculture so that suppliers, processors and consumers can exploit advantages offered by the market. LFMI seeks:
- to abolish state planning and distribution in agriculture,
- to abolish price controls;
- to replace economic interventions with social aid policy.
X. Macroeconomic Data
We aim to possess and make use of quality information about the macroeconomic situation and developments by
- collecting and analysing economic data;
- using this data in substantiating LFMI's policy proposals;
- creating conditions for entrepreneurs and other groups to use the data.
XI. Non-governmental Organisations
The goal is to foster philanthropic traditions by creating favourable conditions for people to give and receive support.
LFMI seeks:
- to abolish restrictions on private giving,
- to legalise anonymous support;
- to abolish restrictions for non-profit organisations to carry out commercial activities.
XII. Other Economic Policy Areas
Our goal is to promote the creation of free market conditions in all sectors of the economy, and to monitor government actions in order to prevent any steps backwards in the development of a business-friendly environment.
Public education
We aim to increase people's understanding of the free market through a wide and effective dissemination of free market ideas in society.
In order to provide conditions for people to seek profound knowledge of free market ideas and their implementation in Lithuania, LFMI publishes bi-monthly newsletters "Laisvoji rinka" and "The Free Market."
In order to enhance public understanding of the operation of free market principles in various economic policy areas, LFMI presents and comments on economic policy issues in the media.
In order to seek open communication, informed dialogue, and a lively exchange of opinions with business people and government representatives, LFMI organises conferences, seminars and round-table discussions.
In order to provide prompt, easy access to free market ideas and day-to-day actualities, LFMI maintains two websites: www.lrinka.lt and www.freema.org.
In order to disseminate free market ideas among younger generations, LFMI delivers lectures and organizes seminars in universities and at youth forums.
In order to popularise free market writings, LFMI publishes books, monographs and papers that promote free market principles and provides opportunities for people to use LFMI's library.
