Lithuania to allocate over $340 million to defence in 2026

The Lithuanian government plans to channel over €300 million in additional tax revenues towards defence spending in 2026, the country's Ministry of Finance has announced.

According to estimates, tax increases will contribute €306 million to the defence budget in 2026, with the figure expected to rise to €524 million in 2027, Caliber.Az reports via Russian media.

The move follows a decision by Lithuania’s State Defence Council in January, which set an ambitious target to allocate between 5% and 6% of GDP to defence from 2026 to 2030. Authorities have since been seeking new sources of funding to meet this goal.

To boost revenue, the government intends to raise corporate tax from 16% to 17%, increase personal income tax rates by 2%, introduce a 10% tax on insurance contracts (excluding mandatory motor insurance), and impose an additional levy on sugary soft drinks.

Alongside these fiscal measures, the government is refining legislation governing the National Defence Fund. The Finance Ministry stressed the importance of public trust, assuring citizens that funds raised through tax hikes will be used exclusively for defence purposes.

Note that, ​in 2024, Lithuania allocated €2.09 billion to defence, equating to 3% of its GDP, marking a significant increase from previous years. This budget supports modernization efforts, including the acquisition of advanced weaponry and infrastructure development. 

Approximately €761 million is dedicated to personnel expenses, while €467.7 million funds military equipment and supplies. An additional €230.8 million is allocated for military infrastructure projects. These investments aim to enhance Lithuania's defence capabilities in response to regional security challenges.

By Aghakazim Guliyev