Plan "Next Generation Lithuania": Government approves referral to the EGC for partial positive assessment by the EC
Today, at the Government meeting, the proposal of the Ministries of Finance and Justice to apply to the General Court of the European Union (EGC) with a request to assess whether the partial positive assessment of the plan “New Generation Lithuania” applied to Lithuania complies with the regulation of this instrument was approved.
Having assessed the information provided by Lithuania on the action taken on milestone 142 "Proposals prepared on the basis of a detailed analysis regarding the abolishment of tax exemptions or special taxation regimes were submitted to the Seimas", the Commission considers the indicator to have reached 50% and has applied a sanction of EUR 8.7 million. To date, Lithuania has received almost EUR 1 billion in grants and more than EUR 470 million in loans under the plan “New Generation Lithuania”.
"The Commission's methodology for determining the suspension of payments under the Recovery and Resilience Facility Regulation was adopted well after the countries had agreed with the EC on their commitments, which puts into question the proportionality of its application, its compliance with the provisions of the EU Regulation and the principles of legitimate expectations. We do not believe that the Commission is correctly exercising the powers conferred on it by the Regulation. The court is the institution that will be able to answer whether what has been presented and promised has been implemented by Lithuania,” said Minister of Finance Gintarė Skaistė.
Procedural documents to be submitted to the EGC by the Ministry of Justice will be prepared after positive approval by the Government. The claim must be filed within 2 months following 10 days from the publication of the EC decision.
We would like to note that on 30 November 2022 Lithuania submitted the first payment request for the implementation of the plan "New Generation Lithuania”, and on 28 February 2023 the EC provided an assessment of the first payment request and announced that EUR 542 million will reach Lithuania: 31 milestones out of 33 submitted have been approved. For the implemented reforms in 2023 we have received EUR 542 million, which is already almost a quarter of the planned amount.
Regarding 2 milestones (tax reform – milestones 142, 144 of the plan NGL) the EC made a decision to temporarily suspend disbursement of EUR 26 million until they are finally achieved. In December last year, the EC assessed the additional information provided by Lithuania on the actions taken and considers milestone 144 "Proposals prepared on the basis of a detailed analysis regarding the expansion of environmental taxes and taxation of other sources less detrimental to economic growth were submitted to the Seimas" fully achieved.
The EC positively assessed the Government's proposals to the Seimas regarding the changes to the immovable property tax. Changes to the environmental taxes have already been presented earlier and the EC has already recognized that this part of the milestone has been achieved.
After evaluating the additional information provided by Lithuania on the actions taken regarding milestone 142 "Proposals prepared on the basis of a detailed analysis regarding the abolishment of tax exemptions or special taxation regimes were submitted to the Seimas ", the EC considers the milestone to have reached 50%. In total, after deducting a part of the already paid pre-financing to Lithuania additionally for these 2 milestones the amount of EUR 14.882 million was disbursed in May.
Lithuania submitted an analysis of tax exemptions and special tax regimes to the EC with arguments for which individual tax exemptions are not abolished. In implementing the aforementioned milestone, the Government submitted to the Seimas draft amendments to the Law on Corporate Income Tax, the Law on Personal Income Tax, the Law on Excise Duty and the Law on Immovable Property Tax, which propose to abolish various tax exemptions. These amendments, in Lithuania's assessment, undoubtedly significantly contribute to the achievement of milestone 142 and fulfil Lithuania's obligations stipulated in the plan "New Generation Lithuania".
In total, the plan “New Generation Lithuania” foresees reforms and investment projects worth almost EUR 2.3 billion in grants and EUR 1.55 billion in loans.To date, 59 reform and 14 investment milestones have been implemented. 38 milestones were reported on to the EC.
Last updated: 13-08-2024
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