Agreement reached on closing the loophole on the VAT relief for farmers

President Gitanas Nausėda says he and the Seimas Board have agreed to fix a loophole in the personal income tax (PIT) exemption for farmers – it should only apply to income from agriculture. 

„Sometimes mistakes have been made in haste, one of the most glaring being the application of the farmers' relief on the basis of a farmer's certificate rather than on the basis of the actual farming activity. This is something that we all seem to agree on, that this hole, which was created in haste, should be corrected so that there are no cases of illegal or incorrect use of the benefits," the President said on Tuesday after a meeting with members of the Parliamentary Board.

BNS wrote that after farmers expressed their dissatisfaction with the tax changes under consideration in the Seimas, the Parliament agreed in June to apply the 15 per cent and 20 per cent tax rates to all persons holding a farmer's certificate, but not necessarily engaged in farming activities. The rates of GPT should be set at 20 per cent and 20 per cent respectively.

Finance minister-designate Kristupas Vaitiekūnas said last week that the tax rate is planned to be adjusted, but that the approved rates for farmers will remain unchanged.

Prime Minister-designate Inga Ruginienė has also spoken of keeping them lower, but she hinted that there are plans to put safeguards in place on the conditions farmers would have to meet to be eligible for such tariffs.

Outgoing Finance Minister Rimantas Šadžius has said that the GPT relief for farmers should be amended. 

Standard VAT rates from next year will be 20, 25 and 32%.