Against all odds
Proposals have been announced for a major overhaul of VAT legislation, replacing the current four levels with a flat rate of 19 percent.
In a move that's been heavily criticized, the Economy Minister is intending to do away with the present 22 percent general levy, and the zero, 3 and 7 percent preferential rates. Only certain yet-to-be-determined food stuffs would be exempt from the new 19 percent rate, with VAT charged at 7 percent.
Hausner hopes that VAT unification will encourage more international and foreign firms to select Poland as an investment target.
"These changes will increase budgetary income and reduce the tax choke," said Hausner, describing the additional zł.3 billion that the reforms are expected to generate.
However, he may face stiff opposition from Social Democratic Left Alliance (SLD) politicians who oppose any VAT increase on pharmaceuticals and agricultural products.
Applauding Minister Hausner's aims, the chairman of PricewaterhouseCoopers, George Johnstone, says fiscal transparency and uniform tax regulation are key areas for companies considering moving into Poland.
"Most International businesses are looking for certainty and consistency of rule application so that they can make investment decisions on a rational basis. They do not want to have to ascribe probabilities as to the appropriate tax treatment," Johnstone says.
If the reforms are to be adopted, then a decision must be made soon because the new VAT regulations are supposed to be in force from January 2005.
In a move that's been heavily criticized, the Economy Minister is intending to do away with the present 22 percent general levy, and the zero, 3 and 7 percent preferential rates. Only certain yet-to-be-determined food stuffs would be exempt from the new 19 percent rate, with VAT charged at 7 percent.
Hausner hopes that VAT unification will encourage more international and foreign firms to select Poland as an investment target.
"These changes will increase budgetary income and reduce the tax choke," said Hausner, describing the additional zł.3 billion that the reforms are expected to generate.
However, he may face stiff opposition from Social Democratic Left Alliance (SLD) politicians who oppose any VAT increase on pharmaceuticals and agricultural products.
Applauding Minister Hausner's aims, the chairman of PricewaterhouseCoopers, George Johnstone, says fiscal transparency and uniform tax regulation are key areas for companies considering moving into Poland.
"Most International businesses are looking for certainty and consistency of rule application so that they can make investment decisions on a rational basis. They do not want to have to ascribe probabilities as to the appropriate tax treatment," Johnstone says.
If the reforms are to be adopted, then a decision must be made soon because the new VAT regulations are supposed to be in force from January 2005.
