Lithuania is entering 2026 with a tax shift that brings its system closer to countries like Ireland and the UK. From January 1, the long-standing flat 15% personal income-tax rate for self-employed people is being abolished for higher earners. These workers will now be integrated into the same new progressive bands that apply to employment income.
On the surface, it’s a technical adjustment. But politically, economically and symbolically it captures a moment in Europe’s history. That is to say, higher defence spending, shrinking fiscal space, EU rules that tie funding to progress on reforms and a public mood swinging towards the idea of “fairness”.
