The head of the government indicated that the nation has formulated a contingency plan should the situation in the Middle East escalate, particularly if oil product prices increase. He clarified that this preparation involves measures beyond standard Value Added Tax (VAT) or excise duty. Speaking to journalists on Friday, the official addressed the economic disparity between Lithuania and Poland.
He noted that due to the Polish economy being nearly eleven times larger, it presents a significant competitive challenge. Furthermore, he suggested that the Polish government may possess greater fiscal latitude for maneuvering compared to Lithuania’s smaller economic profile. This discussion was set against the backdrop of recent Polish fiscal adjustments.
Beginning this Monday, Poland introduced a reduced 8% VAT rate on fuel, a measure scheduled to remain in effect until August 31. According to Prime Minister Donald Tusk, this VAT reduction is expected to decrease fuel prices by between 0.90 and 1.00, depending on the specific fuel type. While the Lithuanian government has stated it does not intend to increase taxes, officials acknowledged considering potential adjustments due to broader economic indicators.
The articulated plan suggests a readiness to respond to external shocks, focusing on mechanisms that address price volatility when traditional tax adjustments are insufficient.
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