The key elements of a stable and sustainable pension system are long-term sustainability and the shared responsibility between the citizens and the state for a dignified and well-funded old age. However, the political parties that entered the elections in Lithuania have little regard for the worsening demographic trends.
A global minimum tax model will reduce tax competition and put companies in a race for public subsidies. The idea of a minimum corporate tax rate of 15% for multinational groups, floating around in international platforms since 2013, has been implemented from the beginning of this year. The Organisation for Economic Co-operation and Development agreed on a new tax regime in 2021, followed a year later by the European Commission.
Just as the protagonist of Shakespeare’s drama gains the courage to take on justice in the course of the play, too must human agency and responsibility win in each of our inner struggles. This is the only way to ensure the sustainability of the pension system by reducing upward pressure on state benefits and allowing people themselves to recover a larger share of their incomes at a time when there will be no active sources of income at all.
The complexity of the advance payment of corporate income tax (CIT) creates administrative burdens for businesses and hinders the path to greater competitiveness. To ensure the stability of the state budget and higher tax revenue collection, the CIT regime was complemented by an advance CIT in the early years of the restoration of Lithuania’s independence. Companies pay it before profits are earned, thus crediting the State.
