A group of PiS MPs have submitted a draft law to the Sejm, which extends the zero VAT rate on basic food products until the end of June 2024.
“The purpose of the proposed law is to amend the VAT law by extending the solution introduced in the field of VAT until June 30, 2024 and aimed at mitigating the effects of inflation, i.e. maintaining the 0% rate on basic food for the next six months,” we read in the justification for the draft.
Zero VAT on food has been in force since February 2022. According to estimates by the Ministry of Finance, maintaining this rate in 2023 will cost about 11 billion zlotys. The changes were introduced by the United Right government to offset the effects of inflation.
Prime Minister Mateusz Morawiecki had previously announced the intention of a group of PiS parliamentarians to present a project to extend the zero VAT rate on food.
The PO MP wants to increase VAT on food
Civic Platform MP Andrzej Domański, who advises Donald Tusk on economic matters, said last week that in his opinion the VAT rate on food should be reduced to 5%.
– The Polish tax system is largely based on VAT, and if we as a Polish state want to be able to finance the necessary investments, and such an investment is, in my opinion, (…) a 30% wage increase for teachers, we need to have a number of sources of income and the 5% VAT on food is of course one of those sources, Domański explained on Radio Zet.
What did Tusk say before the election?
Civic Platform chairman Donald Tusk said at the end of August that there would be no anti-inflation shield in next year’s budget and that VAT on food would be reinstated.
– Nowadays you don’t get (this) information in their government media. I’ve got it. That next year’s budget will no longer contain a shield to protect against at least some of the effects of inflation. That they will restore VAT on food, Tusk said during a meeting with voters in Gdańsk.
– Today, Kaczyński and Morawiecki can say the same thing: “the government will feed itself.” The government benefits enormously from this inflation, the head of the Platform argued before the elections.
Source: Do Rzeczy
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.