Business leaders protest against government's U-turn on tax policy

As part of the 2003 budget the government wants to backtrack on its promised reduction in corporate income tax, reducing the cut from 4% to 1% which would bring the level down to 27%. One of the leading business organizations, the Business Center Club (BCC) blasted the government for its reversal, arguing that failing to reduce business costs would impede a demand-driven recovery. The government defended its position on the grounds that a smaller tax reduction would help ensure less problems for next year's budget. Employers from the BCC believe the policy may backfire, as high costs mean there is less incentive to create new jobs, which are particularly needed given the high rate of unemployment. "We will try to persuade the Ministry that such a small cut will only keep our costs unbearably high and so make our products less competitive on foreign markets," said BCC director Marek Goliszewski. The organization also criticized the plan to maintain the present personal income tax brackets, which apply to small businesses and so cripple their potential as well. (Reuters, September 25)