Lithuanian finance minister says higher taxes will fund defense

VILNIUS - Lithuanian Finance Minister Rimantas Sadzius assured the public on Thursday that revenue from planned tax increases will go toward national defense.

"When we table tax law amendments, we'll also propose amendments to the Law on Defense Fund, specifying how the additional tax revenue would supplement the Defense Fund," he told the Ziniu Radijas radio station.

The minister dismissed concerns that the higher taxes would not be allocated to defense, calling them "a complete misunderstanding".

"From the very beginning, it was stated that security, the security of the country, is our priority," he said.

The Defense Fund was established last year when the previous government also increased taxes to raise additional funding for national defense.

Lithuania plans to allocate 5-6 percent of its GDP to defense over the next five years to speed up the development of its military division.

Sadzius said that while such a spending boost will require borrowing funds, higher taxes will be the only sustainable source for repaying these loans in the future.

He stressed that increasing defense spending is necessary to ensure Lithuania's security.