The minimum monthly wage should rise to 800 euros next year, Economy Minister Ausrine Armonaite says. At the same time, the tax-exempt income threshold should go up to 740 euros, she believes, splitting the burden of raising workers’ incomes between the government and employers.
“We are basically proposing that the pre-tax minimum monthly wage could go up by 70 euros, to 800, and the non-taxable income rate would rise by 200 euros, which would be a much more balanced proposal and would see the non-taxable income go up to 740 euros. We would then not burden business with paying the minimum wage alone, and the state would also take some responsibility, because now, when we say that only the minimum wage will solve this situation, we are basically burdening businesses with such a solution,” Armonaite said on August 25.
With inflation hitting 21% in July, Lithuania’s government is looking for ways to cushion the resulting cost-of-living crisis.
Vaidas Augustinavicius, the president’s adviser on economic and social policy, said earlier the monthly tax-exempt income threshold should go up by at least 100 euros next year.
Mykolas Majauskas, chairman of the parliamentary Committee on Budget and Finance, said last week that the minimum wage could increase by 15-19% in 2023.
In July, the central Bank of Lithuania suggested that the minimum monthly wage could rise by 18.9%, to 868 euros next year. However, it noted that due to a high level of economic uncertainty, more cautious solutions could be used, such as increasing the minimum wage gradually.
This year, the non-taxable income threshold stands at 540 and the pre-tax minimum monthly wage is 730 euros (550 euros after tax). (LRT/Business World Magazine)
