Arms Trade in Lithuania
Lithuania remains the only European Union country where non-manufacturers are prohibited from trading in Category A weapons. This is far more than a technicality in the law—it is a structural gap that costs the country millions in lost revenue, undermines competitiveness, and weakens the national defense ecosystem at a moment when security concerns are the highest they’ve been in decades.
As the government debates new tax increases, one question becomes unavoidable: why look to citizens’ pockets when the state itself is ignoring revenue streams that are already within reach? One of them is the defense industry market, which in the rest of the EU operates under normal, transparent licensing rules.
A Market Worth Billions—But Not for Lithuania
Across Europe, the brokerage and trade of defense technologies and weapons represents a multibillion-euro market. Lithuanian companies are active participants—just not at home. To engage in the full trade chain, they are forced to register in Latvia, Romania, Bulgaria, or other jurisdictions. The consequences are clear:
VAT and corporate tax flow into foreign budgets, not Lithuania’s.
Investments that could strengthen local defense technologies and create skilled jobs are lost.
Even procurement for aid to Ukraine cannot be conducted through Lithuanian firms—foreign intermediaries profit instead.
A System That Pushes Business Abroad
Rather than fostering a transparent, supervised, high-value sector within its own borders, Lithuania is effectively driving its defense-related businesses into the shadows of foreign jurisdictions. In a period of growing defense spending and geopolitical tension, this self-imposed restriction may be costing the country tens of millions of euros each year.
The Question Taxpayers Deserve to Hear Answered
Why increase tax burdens on ordinary Lithuanians when the state knowingly shuts itself out of legally earned revenue?
What the Defense Industry Really Is
The defense sector is not a free-for-all market. It is among the most tightly regulated and licensed industries in the world. For this reason, Lithuania’s prohibition is not a security measure—it is simply an outdated barrier that no other EU country maintains. Their industries expand, attract investment, and innovate. Ours relocate.
If Lithuania were to responsibly update its regulations:
tax revenues—both direct and indirect—would rise;
new, high-skill jobs would be created;
international suppliers and investors would be drawn to the country;
domestic defense technologies and national security capabilities would grow stronger.
A Strategic Moment Lithuania Cannot Ignore
As global defense systems undergo a fundamental transformation, Lithuania cannot afford to be the country that locks itself out of a strategically vital and economically promising market. This is no longer just a matter of economics. It is a question of national security, competitiveness, and long-term financial stability.
Author: Dalius Andriukaitis
Prepared for the news portal Lietuvos Valstybė