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Week in Lithuania. Lithuanian government abandons progressive taxation plans

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The Lithuanian Government has rejected Wednesday, November 4, the proposal to introduce progressive rates of personal income tax in the country.

In the opinion of the Government, the current taxation system in Lithuania already contains progressive features, since differential deductions apply.

Also, the Government says, there is a high probability that, after the introduction of progressive personal income tax rates, Lithuania could become unattractive to highly skilled specialists, while pay-out of capital revenue could be transferred to other countries with lower tariffs. This, in turn, would undermine Lithuania’s competitiveness. Lithuania has a flat 15-percent personal income tax which applies to income after deducing the so-called non-taxable income which varies for different categories of earners. The bill on introducing progressive personal income tax rates was drafted by Social Democratic MP Algirdas Sysas. PM Algirdas Butkevičius has said that the tax scheme was rejected as labour income is already heavily taxed.

Lithuanian PM’s son-in-law in hot water

Lithuania’s Competition Council has imposed fines on four companies for concluding cartel arrangements. Among the fined ones is Ministerium, until recently co-owned by the son-in-law of Prime Minister Algirdas Butkevičius. The Competition Council has found that companies Ministerium, Nebūk Briedis and public enterprise TV Europe concluded a prohibited agreement while participating in a tender organised by public enterprise Road and Transport Research Institute (KTTI) for the acquisition of software development services. Ministerium was fined 8,800 euros. After media reports accused the company of shady dealings in securing government contracts, Vaitašius sold his 50 percent of the company’s shares in late September.

Two Lithuanian shorts at Stockholm animation festival REX

The international REX animation festival in Stockholm is screening two entries from Lithuania. One of them is the short «Woods»« (Miškas», 2015) by Ignas Meilūnas, a story about a hermit scientist trying to capture a mythic creature to add to his collection. The other is «Guilt» («Kaltė», 2013) by Reda Tomingas is a story of a lonely fox who wants to isolate itself from the world and enjoy its guilt set free. Both shorts have been awarded in Lithuania and internationally.

Lithuania halved greenhouse gas emissions over 25 years

Since 1990 greenhouse gas emissions in Lithuania, including international aviation, were reduced by 55.6 percent or from 49.12 million tonnes of CO2 equivalent in 1990 to 21.81 million tonnes of CO2 equivalent in 2012. In 2013, the share of renewable energy in gross final energy consumption in Lithuania was 23 percent, Eurostat, the statistical office of the European Union (EU), reports. Compared with 1990, most Member States reduced their greenhouse gas emissions by 2012. Emissions have more than halved in Latvia (-57.1 percent), Lithuania (-55.6 percent), Estonia (-52.6 percent) and Romania (-52.0 percent), followed by Bulgaria (-44.1 percent), Slovakia (-41.4 percent), Hungary (-36.3 percent) and the Czech Republic (-32.7 percent).

EC jerks down Lithuania’s GDP growth projections

EC says economic recovery in the euro area and the European Union should continue at a modest pace next year despite more challenging conditions in the global economy. Overall, euro area real GDP is forecast to grow 1.6 percent in 2015, accelerating to 1.8 percent in 2016 and 1.9 percent in 2017. In Lithuania, economy grew just 1.4 percent in the first half of 2015, considerably less than expected. While domestic demand growth was stronger than in 2014, overall growth was hit by a significant drop in exports to Russia. As a result, growth for 2015 is forecast at 1.7 percent. Lithuania’s real GDP growth is forecast to accelerate to 2.9 percent and 3.4 percent in 2016 and 2017, respectively. Rising nominal wages are expected to support strong growth in private consumption, which is set to remain the main growth driver. Export growth is forecast to improve in 2016 as the impact of the Russian crisis fades and demand from the EU strengthens. By 2017, Lithuania should have redirected most of the exports lost in 2015 to other markets. However, as imports are set to grow faster than exports based on the high import content of domestic demand, net exports are expected to be a drag on real GDP growth in 2016 and 2017, albeit to a lesser extent than in 2015.

Ryanair launches new route to Israel

Budget airline Ryanair has launched a new winter route from Kaunas to Eilat Ovda (Israel), starting on November 5 with a twice weekly service, Kaunas Airport reports. Ryanair celebrated its new Kaunas to Eilat Ovda flights by releasing seats for sale at prices starting from EUR 14.99 for travel in November, December and January. These low-fare seats are available for booking on the Ryanair.com website until midnight Saturday, 7 November.

Politicians blame alcohol after quadruple murder

After a quadruple murder in the town of Kražiai, western Lithuania, where a man stabbed four women to death, Lithuanian politicians point fingers at excessive alcohol consumption as the culprit. Speaker of the Lithuanian Parliament Loreta Graužinienė said it was a painful tragedy and alcohol was likely the main reason behind it. «Fighting alcoholism, helping people suffering from alcoholism, is probably insufficient. We must think about programmes and assistance to communities,» Graužinienė said and offered sympathies to the families of the deceased and to the local community. On the other hand, the Seimas speaker did not mention additional restrictions on alcohol. Prime Minister Algirdas Butkevičius also blamed the consumption of alcohol for the tragedy.

Lithuania sentences spy

Vilnius County Court found former employee of state enterprise Oro Navigacija (Air Navigation) Romualdas Lipskis guilty of espionage. The man was sentenced to three years and three months behind bars in a correction house. This is the first espionage case that reached the court after the restoration of Lithuania’s independence. Prosecutors and the State Security Department (VSD) announced in November 2014 that the accused man had been spying for Belarus. Based on evidence of the case, the man had been taking photographs of documents and other objects in his office while working at Oro Navigacija and transferred them to the Main Intelligence Directorate of the General Staff of the Armed Forces of Belarus. It is suspected that the accused collected and transferred information about the Lithuanian Armed Forces, its units, state enterprises that have strategic importance for Lithuania’s national security, as well as their activity and equipment..

Wind power generation on rise in Lithuania

Over the first nine months of this year, wind power plants in Lithuania produced 511GWh of electricity, up by 13.2 percent compared to the same period last year. Overall, electricity production grew 10 percent in Lithuania. Wind power accounted for a fifth of all electricity production in Lithuania. Saulius Pikšrys, the head of the Lithuanian Wind Power Plant Association, said that in 2016, when the new wind turbine farms will start working, wind power plants should generate 14 percent of all electricity consumed in the country. According to the Lithuanian Wind Power Plant Association, the new power plants should add 210MW to the country’s electricity generation capacity next year. There are currently 17 wind turbine farms in Lithuania with a total power of 282MW.

Baltic States ramping up cooperation in cyber security

Lithuanian Defence Minister Juozas Olekas, Latvian Defence Minister Raimonds Bergmanis and Estonian Economic Affairs and Communications Minister Kristen Michal electronically signed a memorandum on cooperation in cyber security on Wednesday, November 4.The three Baltic States agreed to share experience and knowledge about cyber security policies and their implementation directions, support international cooperation and information sharing in public and private investigations and in creation of information system and web page security.

Lithuania to extend conscription

Artūras Paulauskas, head of the Seimas Committee on National Security and Defence, says that parliamentary groups of Lithuania have agreed that the country will draft conscripts in 2020-2021. Under current agreement, military draft was introduced for the period between 2015 and 2020. According to the head of the Seimas Committee on National Security and Defence, the number of conscripts will remain unchanged, with around 3,000 drafted each year.

Nine companies cleared to export meat to USA

The Food Safety and Inspection Service of the United States Department of Agriculture officially announced the list of nine Lithuanian companies which will be allowed to export meat products to the USA. All nine meat processing companies which intend to offer their beef, pork, and veal products to the U.S. market have been granted a permit for production exports from Lithuania. This is a great achievement of the Government, Lithuanian institutions and diplomats, said Lithuanian Prime Minister Algirdas Butkevičius.

MPs want more funding for State Security Department

The Lithuanian government is planning to increase the budget for the State Security Department (VSD) by 500,000 euro. However, parliamentarians say that in view of the growing geopolitical threats, the VSD should receive a far bigger budget increase. Most law enforcement authorities should have their budgets raised next year. The VSD, which is responsible for national security, should receive 23 million euro next year, which is around half a million more than its funding in 2015.

Lithuania to target 10 priority export markets

A list of priority export markets was approved in Lithuania’s Ministry of Foreign Affairs Economic Diplomacy Council on Tuesday. The Ministry of Economy and public institution Enterprise Lithuania conducted an analysis, dividing the most important markets for economic cooperation into three categories. Development markets include: Sweden, Norway, Germany, United Kingdom, and France; promising markets are the USA, China, Israel, Japan, and Ukraine; markets to prospect are the United Arab Emirates, Canada, Turkey, and South Africa.

Former finance minister to run for Seimas

Ingrida Šimonytė, deputy chairwoman of the Board of the Bank of Lithuania, will be running in next year’s parliamentary elections in one of Vilnius single-member constituencies. Her candidacy was put forward by the conservative Homeland Union – Lithuanian Christian Democrats (TS-LKD).

Utena mayor removed from office on bribery suspicions

The Panevėžys city unit of Lithuania’s Special Investigation Service (STT) is investigating suspected bribery by Utena District Mayor Alvydas Katinas. STT officers want to find out whether the mayor had demanded a bribe for another person from a joint stock company. The District Court of Panevėžys City has removed the mayor from his office for two months. He also had to make a written pledge not to leave the country.

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