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Non-taxable income should be increased instead of the minimum wage and that would put more money in the pocket of workers, according to Naglis Puteikis, a member of, and tapped to be leader of, Lithuania’s newest political party, Increase Tax-Exempt Income (NPD).
Naglis Puteikis
© DELFI / Mindaugas Ažušilis

“All the economists agree that the non-taxable income rate, not the minimum monthly wage, should be increased in Lithuania. Increasing the minimum monthly wage kills off small and medium businesses in the districts, as the employer needs to find additional funds from somewhere. After all, by increasing the minimum monthly wage, other costs increase as well for the employer,” said Puteikis, MP and a former conservative, on LRT's Dėmesio centre programme.

“Economists say that if the state exempts those who earn minimum wages from income tax, as all the civilized countries do, employers are not negatively affected, and the worker gets more revenue,” he said.

Puteikis criticised Finance Minister‘s Rimantas Šadžius' position that taxes should be also paid by the poorest people, and pointed to the United States, where he said people who receive the minimum wage do not pay taxes.

“If I am speaking as a populist, then all Lithuanian economists - Nerijus Mačiulis, Žygimantas Mauricas, Gitanas Nausėda, Aušra Maldeikienė – are populists as well. They say that it is the only way to deter from immigration. It is estimated that Lithuania annually pays out around €30 million for benefits to employed people. If we exempt them from taxes, this stupid circle, a waste of resources and time, would be redundant,” he said.

According to Puteikis, the goal of the new party is to push for the non-taxable income rate as it is in Germany, the United Kingdom or the US, which would reduce emigration.

“The party is basically a provocation for the Social Democrats and the Conservatives. We might not win the elections, but it would still be some kind of positive provocation to force parties to raise the current non-taxable income rate,” said Puteikis.

The new party was set up last week and it is believed it will be lead by Puteikis who got fourth place in the last presidential elections.

LRT