“Publicly, we have heard various proposals to raise one or another tax. This indeed may be and has to be discussed, but people and businesses should not be pointlessly intimidated about new compulsory taxes for total defence,” she said in an interview to the radio station Žinių radijas on Tuesday.

The adviser stressed that any new defence tax has to be considered in the context of the tax reform, otherwise it would be less beneficial.

“A tax reform is not being discussed, but essentially greater taxation on people or businesses is being talked about, without offering any beneficial changes in return,” said the adviser, adding that it would be more beneficial if the tax reform was completed at first and only then new taxes introduced.

The new defence tax was proposed by Conservative MP Laurynas Kasčiūnas, chairman of the Seimas Committee on National Security and Defence. He intends to discuss the idea with parliamentary parties.

Meanwhile, the Social Democratic Party (LSDP) has proposed issuing “defence bonds”. Yet this idea was criticised by the Conservatives (TS-LKD). The latter argue this would be just ordinary borrowing subject to restrictions of the Maastricht criteria and would not be a sustainable long-term solution.

In 2024, Lithuania’s defence spending is planned to reach 2.75% of GDP, compared with 2.52% in 2022.

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