The Lithuanian parliament Seimas on September 27 voted in favour of keeping the current zero VAT rate on district heating for two more heating seasons.
The measure, proposed to mitigate a surge in heating bills, is estimated to cost over 110 million euros to the state.
The amendments to the Law on Value Added Tax were passed, with 94 parliament members voting in favour, three against and 29 abstaining.
The Finance Ministry estimates that the state will lose around 54 million euros in budget funds in the 2022-2023 heating season and further 57 million euros in the 2023-2024 heating season, provided prices remain the same as in the first half of 2023.
District heating and firewood used for heating are subject to a reduced VAT rate of 9%. Last winter, the government decided to cut and reimburse the VAT on heating to relieve pressure on households. (LRT/Business World Magazine)