Government approves improved draft State budget for 2026-2028

Today, the Government approved the improved draft State budget for 2026-2028 prepared by the Ministry of Finance.

"The improved draft State budget shows that the XXth Government is concerned about security in a number of directions: adequate attention is paid both to the protection of the external borders and to the social area. The amendments to the draft budget significantly contribute to the improvement of social guarantees, it is planned to increase wages for pedagogical staff and officials, we found opportunities to allocate additional funds for cultural and other purposes. This draft budget demonstrates how much can be done in cooperation and together to achieve the common goal of finding additional funds for those who need it most", Prime Minister Inga Ruginienė states.

"This budget is balanced to meet top priorities of the population - we raise salaries for pedagogical staff, academia and statutory officials, and invest in social security, infrastructure and culture. At the same time, we are not only providing unprecedented funding for defence but also committing to maintaining it in the long term. The budget reflects the will of the governing coalition - security and deterrence must be financed without compromise, and national defence remains our top priority, as today's geopolitical reality requires decisions with real power rather than symbolic ones," Minister of Finance Kristupas Vaitiekūnas notes.

According to the Minister, "our goal is for the 2026 budget to be sustainable, responsible and focused on real improvements in quality of life of the population. While fiscal space is limited, we make decisions that bring the greatest returns to society today and in the future, and every additional euro goes where it creates the most value."

The improved draft budget has been prepared taking into account the proposals received from the Seimas committees, commissions, members, state institutions and bodies for more than EUR 1 billion, as well as legislation already adopted or under consideration in the Seimas.

Amendments to the draft budget: expenditure

The improved draft State budget for 2026-2028 adds EUR 115.7 million to the increase in personal income next year. Of these, EUR 101.3 million are allocated to raise the salaries of pedagogical staff, academic and non-academic staff of higher education and research institutions, sports coaches (+8.41%), EUR 11.2 million to statutory officials (Fire and Rescue Department, Police Department, State Border Guard Service, Prison Service, Probation Service, Customs Department), EUR 2.6 million to staff of the Seimas Chancellery and EUR 0.5 million to staff of the National Audit Office.

With this additional allocation, teachers' net salaries will grow on average by EUR 157 next year, those of academic staff of higher education institutions by EUR 177, and coaches by EUR 128.

In accordance with the adopted amendment to the Law on the Lithuanian National Radio and Television (LRT), the reduced appropriations to LRT - EUR 8.5 million - will be allocated to the cultural sector: M. K. Čiurlionis's anniversary exhibition in Tokyo to cover transportation and insurance costs (EUR 235, 000 in 2026), Lithuanian-German cultural exchange programme (EUR 200, 000 in 2026), and other cultural purposes.

Finally, next year an additional EUR 1.2 million is allocated to the Chancellery of the Seimas to prepare for the Presidency of the Council of the EU and the TV programme "Seimas Live" (broadcasting via digital terrestrial network).

Amendments to the draft budget: revenue

The improved State budget for 2026-2028 increases the revenue from excise duties following the Government's agreement in principle to two draft amendments prepared by the Seimas members to the Law on Excise Duty, for which the Seimas requested the Government's conclusion. These draft amendments propose to increase excise duty rates on e-cigarette liquid and heated tobacco, as well as on ethyl alcohol, faster than foreseen in the three-year rate increase plan.

The Government proposes to maintain the principle that tax-increasing decisions take effect no earlier than 6 months after their adoption. The Government also considers the introduction of an obligation to inventory e-cigarette liquid as a prerequisite for increasing the rate on e-cigarette liquid. This would avoid the current accumulation of stocks at a lower rate.

The adoption of the adjustments to the draft laws, provided that both the inventory and the amendments enter into force on 1 July 2026, would result in an additional budget revenue of EUR 27.3 million in 2026 on an accrual basis (EUR 22.7 million on a cash basis).

Dynamics of the balance

The improved draft State budget for 2026-2028 prepared by the Ministry of Finance projects the general government deficit in 2026 to remain the same compared to the initial draft State budget for 2026-2028, at -2.7% of GDP, but without taking into account the acquisition of military equipment, weapons and stockpiles, the statistical correction of expenditure increases from -4.7 % of GDP up to -5% of GDP. General government debt is increasing from 45.1% of GDP in the initial draft State budget for 2026-2028 up to 45.4% of GDP.