The correct option is D Compared with that enforced by members of the European Union in 2000, the policy of applying indirect taxes, like value added tax and excise duties, that was enforced in Lithuania was less strict, imposing tax rules and tariffs that, for the most part, needed to be tightened so that the country would harmonize with the EU’s requirements rather than loosened
Options A, C, & E each suffer from Subject-Verb agreement errors ⇒ Eliminated.
So the battle is between B & D.
As a previous post correctly points out, the main decision point here will be parallel structures.
Let's check out the different things compared in B and D:
"tax rules and tariffs that..."
B) needed to be TIGHTENED...rather than LOOSENING THEM
D) needed to be TIGHTENED...rather than LOOSENED