The Lithuanian parliament is expected to hold a final vote on Thursday on changes to property and personal income tax rates, set to take effect in 2026, as well as on new rules for second-pillar pension accumulation.

The proposed tax and pension reforms aim to help Lithuania meet targets agreed upon with the European Commission and unlock funding under the Recovery and Resilience Facility (RRF).

In response to the planned tax overhaul, the Lithuanian Grain Growers Association, the Agricultural Council, and the Farmers’ Union are staging a warning protest – the second in a week – in Vilnius on Thursday.

Audrius Vanagas, chairman of the Grain Growers Association, told BNS on Wednesday that this protest would be smaller than last week’s and is timed to coincide with the planned vote on amendments to the personal income tax law.

Vanagas said around 200 people are expected to participate, with about 100 of them observing the plenary sitting. In addition, 32 old tractors will be driven into the city center.

Alongside the tax changes, lawmakers are also expected to approve a two-year opt-out window for the second-pillar pension system, which would run until the end of 2027. Any funds withdrawn during this period would not be subject to tax.

Businesses have warned that the proposed reforms could prompt individuals to leave the pension system, thereby reducing investment by pension funds. Social Security and Labor Minister Inga Ruginienė forecasts that around 20 percent of participants will choose to opt out.

The International Monetary Fund warned in early June that the reform could lead to lower pensions in the future and increase pressure on public finances as the population ages.

The European Commission has also cautioned that the reform could hinder the development of Lithuania’s capital market and restrict access to financing for market participants.

Source: BNS

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