Budget deficit to rise, but businesses will celebrate 19% tax rate

According to the 2004 Budget Bill accepted by the government on Tuesday, all companies, and not just large ones as had been earlier proposed, will be covered by a 19% tax bracket. However, those entrepreneurs who decide to benefit from the new regulation, will have to give up all tax reliefs they enjoyed so far. Furthermore, the government has withdrawn the former offer of increasing the tax-free sum. Due to these changes, the budget deficit is expected to reach zł. 45 billion or 5.3% of GDP, which is nearly zł. 7 billion more than this year. "This deficit is very high. Yet, it is still safe [...] We want to stimulate entrepreneurship and reinforce the growth trends in the economy," said Labor and Economy Minister Jerzy Hausner. The Confederation of Private Employers (PKPP) approved of the introduction of flat tax rate, whereas numerous analysts and Central Bank representatives criticized the excessive deficit that, without the government's "creative bookkeeping", could even amount to zł. 60 billion. (Puls Biznesu, pp. 1, 2, 4; Parkiet, p. 1) M.K.