REPUBLIC OF LITHUANIA
LAW
ON BUDGETING
Chapter 1
General Provisions
Article 1. The budgetary structure of the Republic of
Lithuania shall be determined by its state structure and
administrative-territorial division. The budgetary system of the
Lithuanian State shall consist of the independent State Budget of
the Republic of Lithuania and independent budgets of local
governments. Budgets of local governments shall be subdivided
into the budgets of local governments of the lower and higher
levels. Budgets of local governments of the higher level shall
consist of the budgets of regions and towns (under the Republic's
jurisdiction); budgets of local governments of the lower level --
of the budgets of rural territorial units, settlements and
regional towns.
Budgets shall be drawn up for the budget year beginning on
January 1 and ending on December 31 inclusive.
Article 2. The budgets of Lithuania shall include that
portion of national revenue which is appropriated for
implementing State programmes for education, science, culture,
health care, social welfare and social relief, environmental
protection, as well as for developing the economy, maintaining
institutions of state power and government, and for financing
national defence.
Article 3. Taxes and other payments into budgets shall be
prescribed by laws adopted by the Supreme Council of the Republic
of Lithuania. Councils of regions and towns (under the Republic's
jurisdiction) may introduce local collections.
All legal persons located on the territory of the Republic
of Lithuania, as well as individuals residing on said territory
shall pay the required taxes and other payments into the
appropriate budgets of the Republic.
Article 4. The procedure for apportioning revenues and
expenditures between the State Budget of the Republic of
Lithuania and budgets of local governments shall be established
under Articles 12, 13, 28 and 29 of this Law.
Income tax payable by individual residents, and excise
duties (turnover tax) shall constitute the common source of all
budget revenues. On the recommendation of the Government of the
Republic of Lithuania, the Supreme Council shall determine the
portion (in percentage) of budget revenues that is appropriated
to the budgets of local governments of towns (under the
Republic's jurisdiction) and regions, including the budgets of
local governments of the lower level. The portions (in
percentage) of revenues shall be estimated separately in
accordance with income tax of individuals and excise duties
(turnover tax). (Amended 24 September 1992)
Article 5. Institutions financed out of the budget shall be
allowed to have non-budgetary financial resources. Regulations
for the formation and use of resources by the institutions
maintained from the State Budget and by the institutions
maintained from the budgets of local governments shall be
established by the Government of the Republic of Lithuania and by
the executive bodies of local governments, respectively.
Article 6. The State Budget of the Republic of Lithuania, as
well as the budgets of local governments shall be drawn up and
implemented under the laws of the Republic of Lithuania and in
accordance with general regulations approved by the Government of
the Republic of Lithuania.
Article 7. A uniform classification of revenues and
expenditures, established by the Ministry of Finance of the
Republic of Lithuania, shall be applied to the State Budget of
the Republic of Lithuania and to the budgets of local
governments.
Article 8. Issues concerning the procedure for the drafting
of the budgets of local governments, as well as the financial
plans of ministries, independent departments, State enterprises,
and institutions of the Republic of Lithuania shall be
considered by the Ministry of Finance of the Republic of
Lithuania.
Article 9. Budget operations on a cash basis shall be
performed by the Bank of Lithuania through the credit
institutions of the Republic.
Article 10. Information of the Government of the Republic of
Lithuania and of executive bodies of local governments on the
approved budgets and performance thereof shall be published by
state statistical agencies. Information on the approval and
performance of the budgets of local governments shall be
submitted to the Ministry of Finance of the Republic of Lithuania
in accordance with the procedure established by the Government of
the Republic of Lithuania.
Chapter 2
The State Budget of the Republic of Lithuania
Article 11. The State Budget of the Republic of Lithuania
shall be a centralised fund of financial resources wherein a
certain portion of the national revenues of the Republic shall be
accumulated and reapportioned.
Financial resources accumulated in the State Budget of the
Republic of Lithuania shall be used for financing national needs.
In addition, reapportionment of financial resources for the needs
of local governments shall be performed through the State Budget
of the Republic of Lithuania in accordance with the procedure
established by this Law and other laws of the Republic.
Article 12. The sources of revenues of the State Budget of
the Republic of Lithuania shall be taxation under the laws of the
Republic of Lithuania, and other required payments into the
Budget.
The following taxes and payments shall be paid to the State
Budget of the Republic of Lithuania:
(1) taxes on profits of legal persons;
(2) exise duties (turnover tax);
(3) income tax of individuals;
(4) customs duties;
(5) income received from the exploitation and sale of
stateowned property;
(6) payments collected by the traffic control inspectorate;
and
(7) other payments.
The tax under paragraph 1 hereof shall be paid into the
State Budget by legal persons that do not belong to local
governments by ownership right. Sums amounting to 20 percent of
the profit tax paid by said taxable entities shall be transferred
into the budgets of [appropriate] local governments.
After required sums of taxes under paragraphs 2 and 3 hereof
have been paid to the budgets of [appropriate] local governments,
the remaining amounts shall be included in the State Budget.
The revenues under paragraph 5 hereof shall be included in
the State Budget provided said revenues have been generated from
the exploitation and sale of state property.
Other payments, specified in paragraph 7, shall be included
in the State Budget or in the budgets of local governments
according to the procedure established by relevant laws or, in
the absence of such, by directives of the Government of the
Republic of Lithuania.
Article 13. Appropriations from the State Budget of the
Republic of Lithuania shall be made for the following national
needs:
(1) implementation of educational, cultural, health care and
sports programmes;
(2) social welfare and social relief;
(3) scientific research and technological progress;
(4) environmental protection;
(5) regulation of economic development;
(6) national defence;
(7) maintenance of state power, state government and law
enforcement institutions;
(8) subsidies to regional and town budgets;
(9) development of the Republic's foreign relations; and
(10) implementation of other measures pursuant to the laws
of the Republic of Lithuania.
Article 14. The State Budget of the Republic of Lithuania
shall include the Reserve Fund of the Government of the Republic
of Lithuania; the total amount of said Fund shall be established
upon approval of the State Budget. On the decision of the
Government of the Republic of Lithuania, amounts of the Fund
shall be appropriated for expenditures that cannot be provided
for upon approval of the Budget (with the exception of
expenditures for the maintenance of the administrative
organizational structure).
Article 15. The State Budget of the Republic of Lithuania
shall include a working cash balance that shall be formed from
the budgetary surplus or, if said amount proves insufficient,
from planned budgetary revenues. The amount of the working cash
balance shall be established upon approval of the State Budget of
the Republic of Lithuania.
The working cash balance shall be used to cover temporary
cash deficit and must be reimbursed no later than by the end of
the current budget year.
Article 16. The Government of the Republic of Lithuania
shall organise the preparation of the State Budget of the
Republic of Lithuania. The Draft Budget of the Republic of
Lithuania shall be prepared by the Ministry of Finance of the
Republic of Lithuania.
The Draft Budget of the Republic of Lithuania shall be
prepared based on legislative acts of the Republic, information
from state statistical agencies, socio-economic programmes and
scientific-technolgical projections.
Article 17. The Government of the Republic of Lithuania
shall consider the State Budget of the Republic of Lithuania and
submit it to the Supreme Council of the Republic of Lithuania.
The Draft Budget shall include the following:
(1) the total amount of the revenues and the apportionment
thereof according to the budget items;
(2) the total amount of appropriations and the apportionment
thereof for ministries, independent departments, enterprises, and
institutions of the Republic of Lithuania, separately indicating
social economic programs. The appropriations shall be divided
into the estimated expenditures (including payment of wages) and
unanticipated expenditures; (Amended 24 September 1992) and
(3) budgetary resources for forming the working cash
balance.
Article 18. The standing committees of deputies of the
Supreme Council of the Republic of Lithuania shall consider the
Draft Budget of the Republic of Lithuania and prepare relevant
proposals and conclusions to be submitted to the Supreme Council
of the Republic of Lithuania.
Article 19. The Supreme Council of the Republic of Lithuania
shall consider the Draft Budget of the Republic of Lithuania
taking into consideration the report of the Government of the
Republic of Lithuania, proposals, and conclusions of the standing
committees of the Supreme Council of the Republic of Lithuania,
as well as additional information.
Article 20. The Supreme Council of the Republic of Lithuania
shall approve the State Budget of the Republic of Lithuania based
on the indices specified by paragraphs 1, 2, and 3 of Article 17
of this Law.
The approved State Budget of the Republic of Lithuania shall
be enacted as a Law of the Supreme Council of the Republic of
Lithuania.
Article 21. The State Budget of the Republic of Lithuania
shall be approved no later than two weeks before the beginning of
the budget year.
If the State Budget is not approved in a timely manner, the
monthly budget outlays at the beginning of the budget year (prior
to its approval) may not exceed one twelfth of the State Budget
outlays in the prior budget year.
Article 22. The Government of the Republic of Lithuania
shall organise the maintenance of the State Budget through the
Ministry of Finance of the Republic of Lithuania and its
agencies, as well as through other state institutions and
enterprises.
Article 23. Pursuant to the directives of the Government of
the Republic of Lithuania, additional revenues of the State
Budget of the Republic of Lithuania received during the current
budget year and the amounts of appropriations not applied to a
specified purpose shall be used to meet additional national
demands.
Article 24. The Ministry of Finance of the Republic of
Lithuania shall prepare a report on the maintenance of the State
Budget and submit it to the Government of the Republic of
Lithuania in accordance with the procedure established by law and
at the prescribed time.
Article 25. The Government of the Republic of Lithuania
shall consider the report on the maintenance of the State Budget
and submit it to the Supreme Council of the Republic of Lithuania
for approval. The report on the State Budget performance shall be
approved on the basis of the indices specified by Article 17 of
this Law.
Chapter 3
Budgets of Local Governments
Article 26. The budgets of local governments shall be a
constituent part of the State budgetary system of the Republic of
Lithuania. The budgets of local governments shall be consist of
resources appropriated for financing local socio-economic and
other programmes, as well as for operating and maintaining the
institutions of local governments.
Article 27. Each local government of a region, town (under
the Republic's jurisdiction), rural territorial unit, settlement,
as well as [regional] town shall have its own independent budget.
The budgets of local governments must be adopted without deficit.
(Amended 2 September 1992)
Article 28. The sources of revenue of the budgets of local
governments shall be:
(1) taxes on profits of legal persons;
(2) excise duties;
(3) income tax of individuals;
(4) income received from the exploitation and sale of
property owned by local governments;
(5) land tax;
(6) real estate tax;
(7) motor vehicle duties;
(8) stamp duties;
(9) other payments; and
(10) subsidies.
100 percent of taxes under paragraph 1 hereof shall be paid
to the budgets of local governments by the taxable entities in
which [appropriate] local governments have property rights;
stock companies and private stock companies shall pay to said
budgets 50 percent of the above taxes. The tax revenues shall be
apportioned among the budgets of the regional local governments
and the local governments of the lower level based on the
subordination of the economic units to the appropriate Councils.
An additional amount equal to 30 percent of the taxes on profits
of legal persons paid by the taxable entities in which the
[appropriate] local government has no property rights shall be
transferred to the budgets of local governments. Regional
Councils shall apportion said tax revenues among the budgets of
the regional local governments and the local governments of the
lower level. (Amended 12 October 1993)
The portion (in percentage) of tax revenues under paragraphs
2 and 3 hereof, as established by the Supreme Council of the
Republic of Lithuania in accordance with the procedure prescribed
by Article 4 of this Law, shall be included in the budgets of
towns [under the Republic's jurisdiction] and regions along with
the budgets of the local governments of the lower level. The
portion (in percentage) of said tax revenues established for
regions shall be apportioned among the budgets of the region and
of the governments of the lower level by the Councils of the
appropriate regions.
Tax revenues under paragraph 5 hereof shall be included in
the budgets of towns [under the Republic's jurisdiction] or
regions, and of local governments of the lower level.
Tax revenues under paragraphs 4, 6, 7, 8 and 9 hereof shall
be included in the budgets of local governments pursuant to the
laws on taxation of the Republic of Lithuania, and in the absence
of such -- pursuant to the directives of the Government of the
Republic of Lithuania. If under said legislative acts any of the
indicated tax revenue is not included in the appropriate budgets,
such tax revenue shall be apportioned by the regional Councils.
Subsidies under paragraph 10 hereof shall be transferred
from the State Budget of the Republic of Lithuania to the budgets
of towns [under the Republic's jurisdiction] and regions.
Subsidies to the budgets of local governments of the lower level
shall be disbursed from the budgets of regions.
Article 29. Appropriations from the budgets of local
governments shall be applied to:
(1) financing local governments' programmes for education,
culture, health care, sports, and environmental protection, as
well as for social relief;
(2) developing and regulating the economy of local
governments;
(3) maintaining bodies of state power and executive bodies
of local governments; and
(4) implementing other programmes pursuant to the laws of
the Republic of Lithuania and resolutions of Councils of local
governments.
Article 30. The budgets of local governments shall have a
working cash balance that shall be formed from the appropriate
budget surplus or, if said amount proves insufficient -- from
planned revenues. The amount of the cash balance shall be
established upon approval of the budgets of local governments.
The working cash balance shall be used to cover temporary
cash deficit and must be reimbursed no later than by the end of
the current budget year.
Article 31. Additional revenues of the budgets of local
governments received during the current budget year, as well as
the amounts of appropriations not applied to a specified purpose
shall be placed at the disposal of the local government Councils
and, on their decision, shall be used to meet additional demands
of [appropriate] local governments.
Article 32. If the Supreme Council of the Republic of
Lithuania, the Government of the Republic of Lithuania, or bodies
of local governments of the higher level adopt decisions which
bring about changes in the revenues or outlays of the budgets of
local governments, appropriate inter-budgetary disbursements
shall be made between the State Budget and the budgets of towns
(under the Republic's jurisdiction) or regions, as well as
between the budgets of regions and the budgets of local
governments of the lower level.
Article 33. Draft budgets of local governments shall be
prepared by the executive bodies of the appropriate Councils.
Draft budgets of local governments shall be prepared based on
legislative acts of the Republic, on portions (in percentage) of
revenues from excise duties (turnover tax) and income tax of
individuals payable to local budgets as established by the
Supreme Council of the Republic of Lithuania or by regional
Councils, as well as on information from State statistical
agencies, and socio-economic programmes and scientific-
technological projections.
Article 34. The executive bodies of local governments shall
submit the prepared draft budgets to the appropriate Councils.
Article 35. Standing committees of the appropriate Councils
shall consider the draft budgets of local governments and prepare
proposals and conclusions for the Councils.
Article 36. Local government Councils shall consider draft
budgets taking into consideration reports of executive bodies of
the [appropriate] Councils, and proposals and conclusions of
standing committees.
Article 37. The budgets of local governments shall be
approved by the appropriate Councils. The approval of the budget
shall be enacted by a resolution of the local government Council.
The resolution shall indicate:
(1) the total amount of the revenues and the apportionment
thereof according to the budget items;
(2) the total amount of appropriations and the apportionment
thereof for the one-type enterprises and institutions of the
[appropriate] local government, separately indicating social
economic programs. The appropriations shall be divided into the
estimated expenditures (including payment of wages) and
unanticipated expenditures; (Amended 24 September 1992) and
(3) budgetary resources for forming the working cash
balance.
Article 38. The budgets of local governments shall be
approved not later than two weeks before the beginning of the
following budget year.
If the budgets of local governments are not approved in a
timely manner, the monthly budget outlays at the beginning of the
budget year (prior to its approval) may not exceed one twelfth
of the outlays of said budgets of the prior year.
Article 39. The budget performance of local governments
shall be organised by the Boards of [appropriate] local
government Councils through administrative bodies formed by said
Boards, as well as through other institutions and enterprises
subordinate to the Councils.
The administrative bodies formed by the Boards of Councils
of regions and towns (under the Republic's jurisdiction) shall
control the budget performance of local governments. The
computation and payment of taxes and other required amounts into
the budgets of local governments shall be controlled by state tax
inspectorates under the Ministry of Finance of the Republic of
Lithuania.
Article 40. The executives bodies of the Councils of the
appropriate local governments shall prepare reports on the budget
performance of local governments and submit said reports to the
local government Councils for approval. The reports on the budget
performance of local governments shall be approved on the basis of
the indices specified by Article 37 of this Law.
Vytautas Landsbergis
President
Supreme Council
Republic of Lithuania
30 July 1990
No. I-430