Budget: Sejm to reject construction VAT hike, more trouble looming

It is almost certain the Sejm will not agree to raise the VAT rate on construction materials and services from 7% to 12% as proposed by the government. Since the budget is based on the assumption that the VAT rate will go up, failure to do so would necessitate spending cuts of around zl 300 million, Finance Minister Jaroslaw Bauc said. Other government budget proposals could also be rejected in the Sejm, such as cuts in teachers' salaries and higher than previously expected excise hikes. For example, in the preliminary budget draft presented in July, excise tax on fuels were to increase by 12.2%, but now the draft calls for a 15% hike. (Puls Biznesu, p.8)