"I don't think we need to tax primary homes. Perhaps (we could) discuss (taxing) secondary homes and expanding the luxury property tax base," Skvernelis told reporters.

"This is a matter of discussion that is relevant every year and it will be relevant this year, too, in discussions on a draft budget for 2020, because expectations are high and we have as many financing sources as we have," he added.

The Commission also called on Lithuania to improve tax compliance, to expand its tax base, to consider introducing a car pollution tax and to use the additional revenue for social security purposes.

The prime minister says Lithuania is already making small steps in this direction.

"As to the constant proposal to introduce new taxes that are not directly related to the economy, I believe a small step is being taken. As to pollution reduction, a rather ambitious plan has been endorsed. We'll encourage (people) to scrap polluting cars through certain financial incentives," the prime minister said.

"The measures that are about to be implemented at the State Tax Inspectorate will allow pulling money out of the shadow (economy) and (using it) to finance our social security. We managed to pull over 250 million euros annually," he added.

The Commission's recommendations are not binding as Brussels has no powers to regulate tax policies.

The EU's executive body also recommends that Lithuania improve the quality and efficiency at all education and training levels, including adult learning. In the health sector, it calls on the country to pay more attention to primary care and disease prevention. Brussels also thinks that Lithuania needs a more efficient innovation policy.