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This report is part of the OECD Tax Policy Reviews publication series. The Reviews are intended to provide independent, comprehensive and comparative assessments of OECD member and non-member countries’ tax systems as well as concrete recommendations for tax policy reform. This report provides a comprehensive assessment of Lithuania’s tax and benefit system and recommendations for tax reform. It outlines the country's key economic and tax challenges and assesses the effects of taxation on employment. A special focus is given to the taxation of self-employed individuals.

Lithuania’s population is ageing rapidly. The share of the population aged 65 years and over is expected to grow from 20% in 2019 to 32% in 2050 – faster than the EU average. A growing share of people who need help with their daily activities – so called long-term care. The governance of long-term care is fragmented between the Ministry of Health, the Ministry of Social Security and Labour and the municipalities. This results in a lack of integration of services between social workers and nurses and inequalities in access as eligibility conditions differ. Older people still have unmet needs and face substantial costs. Lithuania has one of the lowest levels of long-term care workers in the EU with only 1 worker per 100 people aged 65 or above compared to the EU average of 4 workers per 100 in 2019. This report suggests avenues to adapt funding streams, improve the coordination and access to long-term care services and strengthen the workforce in the sector.

Being able to swim empowers individuals to make choices, have agency, and be free to choose core aspects of their life, such as working safely on or near water. It is also associated with lifelong health benefits and reduces the risk of drowning. Using data from the Lloyd’s Register Foundation World Risk Poll 2019, this paper provides the first global estimates of adults’ ability to swim without assistance. Individuals in high-income countries are considerably more likely to report being able to swim without assistance than individuals in low-income countries. Disparities also exist within countries. In particular, women are less likely to be able to swim without assistance than men in virtually all countries, birth cohorts, and levels of education. Investing in reducing inequalities in life skills, such as swimming, can foster economic development and empowerment, especially in light of threats, such as climate change.

Understanding adults’ attitudes towards the environment is necessary to gauge the opportunities and challenges of creating effective and politically-feasible climate policies. Using data from the Wellcome Global Monitor 2020, the European Social Survey (Round 8), World Values Survey and EM-DAT, this paper examines how adults’ environmental attitudes vary within and across countries and details how environmental attitudes are associated with adults’ engagement in pro-environmental behaviours and support for environmentally-friendly policies. The paper explores whether the extent to which individuals prioritise the environment over the state of the economy or vice versa depends on individuals’ exposure to natural disasters or negative labour market conditions. Results indicate that people’s economic vulnerability and the sectors they work in impact their attitudes towards their environment and support for public policy. Furthermore, the findings suggest that increases in unemployment and exposure to natural disasters influence the extent to which individuals prioritise the environment.

Lithuania’s economy exited the COVID-19-crisis successfully and was growing fast until early 2022, buoyed by rising exports and rapid integration into global value chains. However, with Russia’s aggression of Ukraine continuing and its consequences spreading, the outlook has darkened. Growth has slowed, and inflation has risen to some of the highest levels in the euro area, driven by high energy and food prices. The country cut all energy ties with Russia, relying on imports from other countries instead. The government supports the many Ukrainian refugees and helps households and firms weather the energy crisis. Structural unemployment and skills mismatch remain high, while poverty declines only slowly. Further reform could help maintain economic resilience and cope with rising uncertainty. Reducing the scope of state-owned firms and improving their governance would help raise productivity. Linking education to labour market needs more closely would help improve employment and skills. Greater uptake of digital technologies by firms, along with a modernised public sector and strong skills will also help lift trend growth. Reaching the climate objective of net zero emissions by 2050 will require bold policy action, both on the tax and the spending side. SPECIAL FEATURE: REAPING THE BENEFITS OF DIGITALISATION

Since 2006 Lithuania has taken steps to ensure higher operational efficiency and to reduce the disparity in prices for water supply and sanitation services. However, progress has been slow. Concerns have emerged regarding representation of small municipalities in consolidated utilities and increased costs for some consumers. Reform of Water Supply and Wastewater Treatment in Lithuania presents practical options to implement the national strategy towards the consolidation of water supply and sanitation services in Lithuania as a tool to foster operational efficiency and financial sustainability of the sector. Analyses and recommendations benefitted from discussions in two pilot regions in Lithuania, to test the practicality of consolidation scenarios and accompanying measures. Particular attention is paid to tariff setting and different modes of benchmarking – including development plans benchmarking - as tools to incentivise performance. The report provides insights for countries facing similar challenges or seeking to improve the efficiency of water service provision. The project was undertaken in collaboration with – and with the financial support of – the Directorate-General for Structural Reform Support of the European Commission.

The paper is the first in a series of two papers mapping young people’s environmental sustainability competence in EU and OECD countries that were prepared as background for the forthcoming OECD Skills Outlook 2023 publication. The papers are the results of a collaboration between the OECD Centre for Skills and the European Commission - Joint Research Centre (Unit B4) on students’ environmental sustainability competence. The second paper is titled: ‘The environmental sustainability competence toolbox: From leaving a better planet to our children to leaving better children for our planet’.