VILNIUS — The Lithuanian government on Monday greenlighted most of a Defense Fund package, which would allow an increase in the country's defense funding to 3 percent of gross domestic product (GDP) in the coming years.

The package, unveiled by the finance ministry in May, will now go to the parliament.

The ministry also proposed borrowing via defense bonds and notes from individuals and entities, capped at a 2 percent borrowing cost

Among the measures, the ministry proposed increasing the corporate tax rate by 1 percent to bolster defense funds from the current 15 percent. Additionally, a quarter of the package entails adjustments to excise duties, including price hikes on alcohol and tobacco over three years, besides introducing a 6 percent "defense component" per liter on all fuel types.

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The ministry also proposed borrowing via defense bonds and notes from individuals and entities, capped at a 2 percent borrowing cost.

Further, it proposed to allocate 25 million euros ($27.1 million) from local municipalities' residential income tax share to civil protection. The Defense Fund encompasses the existing temporary bank solidarity levy, extended for another year.

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According to the finance ministry, if ratified by the parliament, the changes could yield an additional state budget revenue of 297.8 million euros ($322.9 million) in 2025, 421.2 million euros ($456.8 million) in 2026, and 436.5 million euros ($473.5 million) in 2027.