2024-07-25 22:06:24
According to the SADM, such a decision is a compromise, based on the opinions expressed in the Tripartite Council, the proposals of the Bank of Lithuania and updated economic forecasts.
Currently, MMA is 924 euros and accounts for 43 percent. of the average gross salary and from 2021, when it reached 642 euros, it has already risen by 44%.
This is one of the fastest growing MMAs among OECD countries. SADM seeks to avoid increasing too quickly, as too high an MMA would mean that exporting companies would no longer be able to sell their output.
“Our goal is to increase MMA consistently, but carefully, while encouraging exporting employers to move from competition at a lower price to competition at a higher quality,” says Acting Minister of Social Security and Labor Vytautas Šilinskas.
The tripartite council agreed on the increase of the MMA, but did not take a single decision on the size of the MMA for 2025, as different opinions were presented on this issue: the representatives of the workers proposed raising the MMA according to the agreed formula, ie 15.8 percent. or up to 1,070 euros, the representatives of the employers approved the proposal of the Bank of Lithuania to gradually increase the MMA, to raise the MMA by 10% from 2025. or up to 1016 euros.
If employers and employees do not agree on the specific amount of MMA, SADM suggests following the strategy of employers and the Bank of Lithuania at 50 percent. VDU will not be reached immediately, but within two years.
On the other hand, the specific amount is offered higher than what the employers wanted, because according to the updated forecasts, the average wage will grow faster than planned during the discussions in the Tripartite Council.
According to the Ministry’s preliminary calculations, if MMA is set at 1,038 euros and the same tax-free amount of income is applied this year, the income of MMA earners after deduction of taxes would increase by 69 euros and reach 777 euros next year.
This is more than the tentatively predicted 2025 relative poverty risk threshold – 732 euros.
The MMA is approved by the Government after receiving the recommendation of the Tripartite Council and taking into account the indicators and trends of the country’s economic development. in 2024 The MMA rose to 924 euros before tax, and the non-taxable amount of income (NPD) to 747 euros.
These changes resulted in the monthly income of an MMA earner growing by 75.22 euros and reaching 708.4 euros. In the tax reform project submitted by the Government to the Seimas, it is indicated that one of the essential goals is the expected unification of NPD and MMA by 2028.
In that year, it is estimated that NPD and MMA could reach almost 1200 euros.
It is estimated that in 2024 the decision will require about 200 million euros, and until 2028 its burden on the state budget would reach 573 million. euros.
2024-07-25 22:06:24