“I support the social initiative launched by businesses [to raise] defence spending to 4% of GDP. This goal is ambitious but achievable. However, I see that a raise of VAT is discussed the most. Everyone is aware that all Lithuanian residents pay VAT when purchasing goods. This is not a business tax. Perhaps there would be more solidarity if we considered how business itself could contribute,” Nausėda said in an interview to TV3 television on Monday.
According to the head of state, defence should be funded by people who “have achieved economic success”.
On Wednesday, Prime Minister Ingrida Šimonytė will hold a third meeting between politicians and business representatives concerning sustainable sources of defence funding. At the second meeting in March, options were presented on how to increase defence funding by EUR 400 million. Proposals vary from scrapping tax exemptions, raising corporate income tax to 16%, raising VAT by 1% etc.
Lithuania’s defence spending stands at 2.75% of GDP in 2024. However, there are plans to raise defence spending to 3% of GDP in coming years.
