Belka proposes lower entry level tax bracket and 19% flat rate VAT

Prime Minister Marek Belka has yet another idea how to reform the tax system. This time he proposes increasing the amount of tax free personal income to zł.2,790. According to Belka, the government has concentrated on lowering tax on capital, forgetting about tax on salaries, which resulted in a growing gray zone. "The costs of labor were so high that for those who earn the least it was better to work illegally," said Belka. He believes that the new government's main task will be to "legalize" jobs and to achieve this, changes in the taxation structure are absolutely necessary. "It will be profitable for about 25% of the poorest, while the top 50% will be faced with a slight loss," Belka added. He also hopes to secure a flat rate VAT rate of 19%. (Parkiet, p. 1) D.W.