Committee in favour of a reduction in VAT only on farmers' agricultural income

On Wednesday, the Parliament's Budget and Finance Committee (BFC) agreed by consensus on a proposal to adjust the personal income tax (PIT) exemption for farmers adopted in June to apply only to agricultural income from next year.

„The mistake needs to be corrected“, conservative Gintarė Skaistė told the committee. The current regime provides for separate tax rates for farmers' income without specifying how they would apply to non-agricultural income. 

With the changes to the 15% and 20% tax rates, the tax rates will be set at 15% and 20% respectively. The 20/20 and 20/20 rates would apply only to income from agricultural activities, including income from the sale of agricultural property. This income would be excluded from the other income subject to progressive tax rates of 20, 25 and 32%.

BNS wrote that the aim is to exclude people who do not receive income from agriculture, but only those with a farmer's certificate. These amendments to the VAT law were approved by the Seimas in October after submission and by the government in November.

As BNS wrote, after farmers expressed their dissatisfaction with the tax changes being discussed in the Seimas, the Parliament agreed in June that all those who have a farmer's certificate, but are not necessarily engaged in farming, would be taxed at 15% and 20%. The rates of GPT are also higher than the rates for farmers who are farmers.