Lithuanian PM:VAT discount on heating, hotels will remain
Value-added tax (VAT) discount for centralized heating and hotels will remain, says Lithuania's Prime Minister Saulius Skvernelis, adding that the government would announce the proposed tariff next week.
Up until this June, the VAT tariff for heating was 9 per cent, a tariff also applies on accommodation services. The government has earlier considered discarding the privileges and start applying the usual 21-perc ent size.
The VAT discount for heating was agreed between the prime minister and the opposition conservatives on the reform of the forestry sector, while the decision to leave the lower tax for hotels was made in light of regional competition and projects that are being developed.
The government is discussing a new 15-per cent tariff for hotels, however, the information is yet to be confirmed by the prime minister.
"The exact figures will be announced next week. We have signed an agreement with the conservatives on introduction of a new lower tariff on heating – this will be done," Skvernelis said.
"This will also be good news for hotels. We assessed the risks of how Lithuania would look among other European Union countries, if we had a 21-per cent tariff and the impact it would have on business. This is part of our exports. We have at least 20 hotel developers, business plans in advance and the drastic raise would have an effect," said the prime minister.
Currently, the lower 9-per cent tariff will also be applied on books and transport services, while a 5-per cent tariff is applied on medication. Under one of the scenarios discussed at the government, all of the goods and services should be subject to a 5-per cent tariff starting 2018