IMF support to strengthen tax administration and reduce VAT gap
On 19 June, Minister of Finance Rimantas Šadžius met with Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva in Luxembourg to discuss the possibilities of IMF expert assistance to help Lithuania increase revenue collection, prevent the shadow economy, with a special focus on reducing the value added tax (VAT) gap and strengthening tax administration.
“Hundreds of millions of euros are not collected into the Lithuanian budget every year due to the VAT gap, and at a time when public finances in the country are tight enough, we are asking the IMF for expert assistance in finding reasons and opportunities to address this problem effectively and quickly”, Minister of Finance R. Šadžius stressed during the meeting.
The IMF has already helped address similar issues in other countries, including Poland, and it is expected that after carrying out the analysis, the Fund will offer effective measures to Lithuania as well.
During the meeting, the Minister of Finance thanked the IMF for its continued close cooperation and useful recommendations of the mission under Article IV of the IMF’s Articles of Agreement a couple of weeks ago, which analysed Lithuania's economic situation.
R. Šadžius and K. Georgieva also discussed today's global economic challenges, discussed the IMF's efforts to support Ukraine not only financially, but also by strengthening the capacity of the Ukrainian authorities to implement the necessary structural reforms in the face of the war.
In March 2023, the IMF approved a 4-year USD 15.6 billion funding programme for Ukraine. In order to implement the necessary requirements for the approval of the programme, Lithuania, together with the US, Canada, Japan and other countries, ensured to the IMF that it was ready to continue supporting Ukraine and to ensure the country's capacity to meet its future commitments to the IMF.
The IMF also established the Ukraine Capacity Development Fund, to which Lithuania contributed EUR 1.5 million in 2023. Technical assistance is provided in the main areas of IMF competence – fiscal, monetary, financial sector policy, public finance management, legislation, anti-corruption, statistics, etc.
Last updated: 20-06-2025
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