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Lithuania Considers Defense Tax from 2025 for Security Financing

Laurynas Kasčiūnas, the Chairman of the Seimas National Security and Defense Committee (NSGK) in Lithuania, has proposed the introduction of a defense tax, slated for implementation in 2025. Both coalition partners and opposition members agree on the need for sustainable financing of national defense but have different ideas on how to achieve it.

Kasčiūnas plans to initiate discussions with political parties to determine the best formula for the defense tax, with one possible example being an increase in value-added tax (VAT), similar to what Estonia has done.

Eugenijus Gentvilas, a senior member of the Liberal Movement, suggests exploring all options, including borrowing from Lithuanian citizens who have significant deposits in the country’s banks.

In contrast, Dovilė Šakalienė, a member of the opposition Lithuanian Social Democratic Party, supports temporarily raising the profit tax. She opposes a tax that would burden all Lithuanian residents, especially those with lower incomes.

Saulius Skvernelis, leader of the opposition Democratic Union “For the Sake of Lithuania,” is skeptical about introducing a new defense tax and instead recommends improving tax collection, particularly value-added tax, to fund national defense.

The State Defense Council has approved a plan to establish a land division in the Lithuanian army by 2030, requiring additional funding, with the total planned defense expenditures for the next year expected to reach 2.06 billion euros.

In summary, there is a consensus on the need for sustainable defense financing in Lithuania, but there are differing opinions on the best approach, including the introduction of a defense tax, increased profit tax, and improving tax collection.