FM gets tough on tax

The Minister is changing some earlier proposals before presenting the draft bill on personal income tax to the Cabinet's economic committee on June 1. Under the new regulations, personal income tax  thresholds will be lowered in three years. However, although they will come into force on January 1, 2009, the new regulations will be included in this year's draft bill.

Professionals such as artists, journalists and scientists who currently have only half their income taxed are likely to lose that privilege. Two months ago the Finance Ministry announced that it wants to abolish this tax break. Now it says that "real" artists will keep this privilege and the authorities are working on an appropriate definition of a "real" artist, which is bound to prove controversial.

The Ministry will also introduce its amended proposals on taxing the private use of company cars. In order to avoid paying VAT, companies will have to declare that their cars are not used for private purposes by their employees, which could also prove difficult to enforce.

The new legislation also aims to reduce the number of people erroneously claiming to be self-employed, and a new definition of business operation will come into force. What is more, while the tax card  is bound to stay for two years,  ryczałt, another form of taxation paid by small businesses, will disappear.