Lithuanian parliament passes tax exemption raise

Lithuania’s parliament has raised tax-exempt income threshold, called the NPD, to 400 euros in a move to raise incomes for low-earners.

The amendment to the Law on Income Tax, initiated by President Gitanas Nausėda, was passed in a vote of 111 to zero, with one abstention.

The NPD currently stands at 350 euros and is the monthly amount deduced from one’s salary before calculating income tax. The exact deduction also depends on the income level and is smaller for higher earners.

According to President Nausėda, a higher NPD would leave lowest-paid workers with more disposable income. The raise in the NPD is estimated give extra 10 euros a month for someone on the minimum wage.

The president has also suggested temporarily lowering the income tax rate – from 20 to 15 percent – in order to stimulate spending, but the parliament voted down the initiative.


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