Lithuanian Parliament cuts VAT for periodicals, public transport tickets, equipment for disabled

The amendment to the VAT law was supported by 99 MPs, six voted against and 19 abstained.

Prime Minister Andrius Kubilius, leader of the ruling Homeland Union – Lithuanian Christian Democrats (conservatives), warned the decision would result in a considerable drop in budget revenues.

"The jazz we have observed in the discussion of the issue is very dangerous," he noted, adding that the 2013 budget would lose over 100 million litas (EUR 28.9 m) in revenues.

Kubilius said he would ask President Dalia Grybauskaitė to veto the amendments.

The VAT law was amended with a provision, which stipulates a preferential 9-percent VAT tariff for newspapers, magazines and other periodicals. Under the amendments, the preferential rates will also apply to "transport services and passenger luggage transport on routes of regular transport established by the Transport and Communications Ministry, an authorized institution or municipalities."

The parliament also agreed to the proposal of Algimantas Dumbrava of Order and Justice Party to bring back preferential VAT rate for technical equipment for the disabled and repairs of the equipment.

Nevertheless, the parliament voted down the bids to cut VAT for other products and services, including food products, hotel or special accommodation services.

Currently, the preferential VAT tariff is applied to heating and hot water, state-subsidized medications and books.