State Finances, Budget and Taxation
This domain tests who controls public money and how taxes are created.
Budget
The Seimas approves the annual state budget. The Government prepares the draft budget and implements it. Budget revenue and expenditure are authorising: spending requires a legal basis. The State Control institution audits public finances. The Bank of Lithuania operates within its statutory mandate.
Taxation
Taxes, duties and other compulsory payments must be established by law. A municipality cannot create a new tax by mere resolution, and the Government cannot impose one by decree.
Worked example. A city council adopts a “tourism tax” with no national statute authorising it. The tax is unlawful: compulsory payments require a law, and local self-government cannot supply that legal basis itself.
Traps. The Government adopts the state budget - false; the Seimas does. Taxes may be created by Government decree - false. EU fiscal rules replace the Constitution - false. A budget is merely a plan with no legal force - false; it authorises spending and revenue.