The principle of a defense tax is welcome, but when discussing it, it is important to know from whom and how it would be collected, Kestutis Budrys, President Gitanas Nauseda’s chief national security advisor, has said.
“It is of course possible and worthwhile to talk about additional defense-related taxes, but only when planning a longer-term increase in defense spending,” Budrys told LRT TV on Thursday.
“We have to talk about the details of what we are talking about and who is going to bear the main burden of the tax: whether it will be people through personal income tax, or whether we would introduce it through some kind of progressivity, or whether it would be through businesses, changes to corporate and value added taxes,” the advisor said.
“The principle itself is very fair, civic and solidarity-based, but we can talk about the model itself, what it should look like, when it is on the table,” he added.
The advisor was commenting on a recent proposal by Laurynas Kasciunas, chairman of the parliamentary Committee on National Security and Defense, that the authorities should consider introducing a defense tax.
The debate on additional funding for defense comes amid criticism from the president’s office and some MPs that next year’s draft national defense budget does not earmark funds for the plan, approved by the State Defense Council, to create a Lithuanian Land Force division.
Budrys reiterated his proposal that next year’s budget could provide for borrowing for national defense needs as long as the public deficit remains within the Maastricht limit. Such an option is included in this year’s budget law.
“These two things are not contradictory,” the advisor said, referring to a defense tax and the option of borrowing.
“As for next year, including this option without changing the law is simply reasonable, accurate and fair,” he said.
Currently, the government suggests allocating 2.71 percent of GDP to defense in 2024, with 2.52 percent coming from the state budget, and the rest from the so-called “solidarity contributions” by banks.
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