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The policy of applying indirect taxes, like value added tax and excise duties, that were enforced in Lithuania was less strict when compared to the European Union’s members’ in 2000, which imposed tax rules and tariffs that, for the most part, needed to be tightened in order to harmonize with the EU’s requirements and not to loosen it for the purpose of remaining competitive with trading partners outside of the EU.

A
The policy of applying indirect taxes, like value added tax and excise duties, that were enforced in Lithuania was less strict when compared to the European Union’s members’ in 2000, which imposed tax rules and tariffs that, for the most part, needed to be tightened in order to harmonize with the EU’s requirements and not to loosen it
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B
The policy of applying indirect taxes, including value added tax and excise duties, enforced in Lithuania was less strict when compared with the policy applied by the European Union’s members in 2000, 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 loosening them
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C
When it was 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 were enforced in Lithuania and that were less strict, were imposing tax rules and tariffs that, for the most part, needed to be tightened in order to harmonize with the EU’s requirements rather than loosening them
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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
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E
In 2000, Lithuania, compared with the members of the European Union, had a policy of applying indirect taxes, including value added tax and excise duties, that were enforced less strictly, since it imposed tax rules and tariffs that, for the most part, needed tightening in order that they would harmonize with the EU’s requirements and not to loosen
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Solution

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

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