05-04-2024

The Government approved the one-stop shop for administration of fines

Today, the Government approved the draft amendment to the Law on Tax Administration prepared by the Ministry of Finance and the State Tax Inspectorate (STI), by which from 1 July 2026, taxes, economic monetary sanctions, fines and amounts awarded by the court would be administered on a one-stop shop basis via the STI system. The implementation of the draft amendment will result in a significant reduction of the costs incurred by residents due to debt recovery and the administrative burden.

"The purpose of the draft amendment is to efficiently administer all liabilities to the state. Currently, there is no comprehensive database of persons who owe the state, tens of different institutions administer the liabilities to the state, the processes are not digitized, and the debt recovery process is expensive. Our proposed changes will improve the administration of liabilities to the state and, most importantly, will reduce the costs incurred by residents," says Vice-Minister of Finance Rūta Bilkštytė.

The draft amendment implements the reform "One-Stop Shop for Payment of Liabilities to the State" included in the plan "New Generation Lithuania".

The draft amendment to the law approved by the Government proposes that from 1 July 2026 the STI is tasked with fulfilling not only tax liabilities, but also other liabilities to the state, such as administration of fines for administrative offenses, economic monetary sanctions, procedural fines, amounts awarded by the court and fines for criminal acts. The STI will inform about debts, carry out accounting of liabilities to the state, set off tax overpayments, recover from accounts, and only if recovery fails, transfer recovery to bailiffs.

Applying standardized digital procedures would not only reduce the administrative burden, information would reach residents faster and more conveniently, but also the recovery of debts to the state would become much cheaper for residents. Currently, the rates for bailiff services are applied, which for small amounts of debt (up to EUR 60) may exceed the debt itself from 1.8 to 10 times. When debt recovery is carried out by the STI, residents would incur costs of only about EUR 2, which are the maintenance fees of the Cash Restrictions Information System (CRIS).

All debt recovery, including tax, would be carried out by bailiffs, if residents already have any debts that are already being recovered by bailiffs, i.e. the STI would transfer the recovery to the bailiffs in cases where:

  • debt recovery from accounts could not be implemented within 6 months;
  • a person does not have bank accounts, but has assets or income;
  • the bailiff is already conducting debt recovery from a person who has assets or income from which recovery can be carried out.

The draft amendment to the law would ensure that all pecuniary obligations to the state reach the budget as soon as possible. These provisions would significantly improve the administration of liabilities to the state:

  • on the one hand, the rights of individuals to be informed about their liabilities to the state, recovery procedures would be ensured, voluntary payment of debts would be encouraged, the financial and administrative burden of those who do not hide from recovery would be reduced,
  • on the other hand, the STI, having centralized up-to-date information about liabilities to the state, an effective debtor information system and recovery tools, will be able to use them properly and efficiently, i.e., state competences and technical possibilities for administration of liabilities to the state will be used rationally.

After the Government approves the draft amendment to the Law on Tax Administration, it will be submitted to the Seimas and proposed for adoption under urgent procedure.