From Entrepreneurial Exceptionalism to Fiscal Normalization: Lithuania’s 2026 Tax Reform

Lithuania’s 2026 tax reform represents a step forward toward fiscal normalization following three decades of post-Soviet transition. Centred on a new progressive personal income tax (PIT) applied more consistently to employment, self-employment and other income, the package also introduces moderate adjustments to corporate and property taxation and a dedicated security levy. This article situates the reform within Lithuania’s evolving fiscal trajectory, suggesting that the reform represents a stage in the consolidation of administrative capacity and redefinition of fairness within the tax system.