“When adopting the new Labour Code, we pledged to strengthen people’s potential of negotiating for and ultimately obtaining higher salaries. By adopting the current law, we are acting on that pledge. A million of people in employment who pay personal income tax will now finally be able to grant 1 % of the tax to the authority that is well placed to increase their salaries, i.e. the organisation that supports collective bargaining on the salary size. Moreover, this contribution will not be in competition with another very important contribution, often made use of by less wealthy families. Admittedly, the funding of our public sector has a systemic problem. We de facto have paid education, as many of Lithuania’s residents grant 2 % share of their personal income tax to kindergartens and schools. This is particularly true of the less wealthy families, who are not otherwise able to contribute. Today, we offer them a way to contribute to raising their salaries through collective bargaining authorities, namely, trade unions,” Tomas Tomilinas, Deputy Chair of the Committee on Social Affairs and Labour of the Seimas, said.
“By this Law, we propose strengthening the trade unions, enabling wider public engagement and raising the public bargaining power. We suggest that everyone in Lithuania is allowed to support trade union activities by allocating 1 % of their income tax to trade unions. In order to avoid setting political parties against each other and in order to allow residents to continue making the 2 % contribution to NGOs, nurseries, kindergartens and schools, we are granting an opportunity for citizens to grant 1 % of their personal income tax to support trade unions,” said Vytautas Bakas, Chair of the National Security and Defence Committee of the Seimas, during the deliberations on the draft.
According to Mr Bakas, support for the draft law would foster the emergence of a new generation of trade unions, promote effective representation of employees, and support those trade unions that are currently efficient in their activities.
The amendments to Article 34 of the Law on Personal Income Tax were adopted by 88 votes in favour, with 13 votes against and 17 abstentions.
The Law enters into force on 1 January 2019. It will apply to the calculation and declaration of revenue for the year 2018 and subsequent periods.
