Toward A Sustainable and Inclusive Consolidation in Lithuania: Past Experience and What is Needed Going Forward

July 3, 2013

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Nan Geng. Toward A Sustainable and Inclusive Consolidation in Lithuania: Past Experience and What is Needed Going Forward, (USA: International Monetary Fund, 2013) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper reviews Lithuania’s fiscal consolidation since 2009, assesses the contribution of revenue and expenditure to the consolidation, evaluates the quality of measures, and draws lessons for the future. It finds that, despite having the lowest revenue-to-GDP ratio in the EU, Lithuania’s fiscal adjustment has so far relied mainly on expenditure measures, with the quality of measures deteriorating over time. The analysis also suggests that Lithuania’s tax system, in comparison with other EU countries and regional peers, is skewed toward labor and consumption taxes, and plays a more limited role in income redistribution, especially in the upper income brackets. The paper argues therefore that there is ample scope to implement high quality revenue measures in order to complete the fiscal adjustment in the medium term in a sustainable and inclusive manner.

Subject: Consumption taxes, Expenditure, Fiscal consolidation, Fiscal policy, Income, National accounts, Personal income, Revenue administration, Taxes

Keywords: Adjustment program, At-risk-of-poverty rate, Composition and quality of measures, Consumption taxes, EU average, Europe, Fiscal consolidation, GDP, Income, Income redistribution, Lithuania, Lithuania's revenue-to-GDP ratio, Revenue, Revenue generation, Revenue side, Revenue yield, Revenue-to-GDP ratio, Sustainability and inclusiveness, Tax effort, Tax rate, Tax structure, Wealth taxation, Well functioning revenue administration, WP

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/157
Stock No:

WPIEA2013157
ISBN:

9781475568851
ISSN:

1018-5941

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