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Social enterprises: evaluation of the impact of state support and corporate income exemptions on the state budget of Lithuania

Author

Listed:
  • Rasa Subačienė

    (Vilnius University, Lithuania)

  • Ramunė Budrionytė

    (Vilnius University, Lithuania)

  • Aida Mačerinskienė

    (Vilnius University, Lithuania)

  • Daiva Tamulevičienė

    (Vilnius University, Lithuania)

Abstract

The increasing interest in social enterprises is related to the specifics of their business activities, which not only involve the most vulnerable part of the society, but also offer greater opportunities for the socialisation of the disadvantaged. As a rule, social enterprises may be entitled to some tax exemptions or may apply for the specific state support. Such tools help to reduce the low efficiency of social enterprises and extend possibilities for the most vulnerable part of the society to participate in the creation of the general economic value of enterprises and the country as a whole. The recent changes introduced in Lithuania reduced the level of the state support and the exemptions from corporate income tax for social enterprises under the impact of the opinion that such enterprises may misuse the status of social enterprises and, accordingly, the state support tools. Therefore, such changes raise the need to evaluate their possible influence on the state budget of Lithuania. The purpose of the research is to evaluate the impact of state support and corporate income exemptions for social enterprises, on the state budget of Lithuania. The object of the research – involves the data of income statements of social enterprises, the information on state support, the state budget of Lithuania for the period of 2013 – 2017. The research deployed the legislation analysis, the inductive and deductive methods, the methods of systematisation, comparison and summary of information. The research results show that the value of corporate income tax exemptions and state support do not have a significant impact on the state budget of Lithuania and reach around the average of 0.18% of the state budget. Nevertheless, the reduction of state support and corporate income tax exemptions may limit the possibilities of social enterprises to reinvest their profits, expand businesses and employ marginalised population.

Suggested Citation

  • Rasa Subačienė & Ramunė Budrionytė & Aida Mačerinskienė & Daiva Tamulevičienė, 2019. "Social enterprises: evaluation of the impact of state support and corporate income exemptions on the state budget of Lithuania," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(3), pages 1156-1171, March.
    • Handle: RePEc:ssi:jouesi:v:6:y:2019:i:3:p:1156-1171
    DOI: 10.9770/jesi.2019.6.3(7)
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    References listed on IDEAS

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    6. Nan L. Maxwell & Dana Rotz, "undated". "Potential Assistance for Disadvantaged Workers: Employment Social Enterprises," Mathematica Policy Research Reports 2ca886dd36c14297b3d6b2b3c, Mathematica Policy Research.
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    More about this item

    Keywords

    social enterprises; state support; corporate income tax exemptions; Lithuania;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General

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