Government and Macro Note
Tax evasion in the first half of this year cost the budget zl. 823 million ($335.9 million) in lost revenues, or 9% of the budget deficit. Unpaid taxes, which showed up in tax controls, rose from last year's zl. 628 million ($256.3 million).
Poland will not need further International Monetary Fund loans next year thanks to its robust economic growth, Finance Minister Grzegorz Kolodko said. The decision was made easier thanks to swelling hard currency reserves, now at about $13 billion, which give the government a wide current account safety margin.
Budget revenues might exceed this year's plan while the deficit will remain within 3% of GDP, Finance Minister Grzegorz Kolodko said. He said the extra revenues will allow the government to spend an additional zl. 1 billion ($408 million) to raise budget sector wages by an average of zl. 90 ($36.73) as of Oct. 1 and add a one-off rise of zl. 38 ($15.51) in December. It would also allow for a 15% pensions rise in December.
The government may offer tax breaks to Bank Slaski, WBK and the savings bank PKO BP if they agree to create building societies, Barbara Blida, Construction Minister said. The three banks met the requirements needed to join the government's program of boosting individual housing construction, she said. The Construction and Finance Ministries are in talks on tax breaks for banks that would take part in the program, she said. The government project is aiming to have building societies set up within banks. The project is currently under parliamentary review.
The Constitutional Tribunal will try to end its probe into a bill curbing pension growth before the government details its 1996 budget later this month. The law, limiting pension growth next year to 2.5% in real terms, was sent to the Court by President Lech Walesa last week. Walesa, who earlier unsuccessfully vetoed the legislation, said it violated citizens' trust in the state and its laws because the measure was designed only for 1996 and pensions would have grown much more under current legislation. The fate of the law is crucial to the 1996 budget, because its scrapping would boost spending by about 5%, forcing the government to rewrite its budget plan.
Poland's expected surplus of 1.5 million tons of grain from this year's harvest is likely to be exported and much of it could go to the former Soviet republics. Grain production rose by 19% this year to 25.64 million tons and included 8.66 million tons of wheat and 6.31 million tons of rye, according to the central statistical office. Analysts said that Poland's domestic needs are about 24 million tons annually. Analysts said the big competitiveness of Polish prices from a few years ago was now diminishing as Polish grain prices crept increasingly closer toward world levels.
During this year's campaign the Agency for the Agriculture Market, which planned to buy four million tons of grain this year, bought wheat at zl. 340 ($140) per ton and rye for zl. 220 ($90) per ton.
Parliament's budgetary committee approved changes in next year's personal income tax, lowering its level for the poorest and increasing it for the better-off. The committee voted 14-4 with one abstention in favor of introducing in 1996 the progressive tax levels of 19%, 21%, 24%, 31%, 38% and 45%, depending on income. The government, which earlier stressed it preferred the tax to stay at the current levels of 21%, 33% and 45%, said the change of rates would not affect next year's budgetary revenues. Deputy Finance Minister Witold Modzelewski said 89% of the population should benefit from the new tax levels and 11% would face higher taxes.
Poland will not need further International Monetary Fund loans next year thanks to its robust economic growth, Finance Minister Grzegorz Kolodko said. The decision was made easier thanks to swelling hard currency reserves, now at about $13 billion, which give the government a wide current account safety margin.
Budget revenues might exceed this year's plan while the deficit will remain within 3% of GDP, Finance Minister Grzegorz Kolodko said. He said the extra revenues will allow the government to spend an additional zl. 1 billion ($408 million) to raise budget sector wages by an average of zl. 90 ($36.73) as of Oct. 1 and add a one-off rise of zl. 38 ($15.51) in December. It would also allow for a 15% pensions rise in December.
The government may offer tax breaks to Bank Slaski, WBK and the savings bank PKO BP if they agree to create building societies, Barbara Blida, Construction Minister said. The three banks met the requirements needed to join the government's program of boosting individual housing construction, she said. The Construction and Finance Ministries are in talks on tax breaks for banks that would take part in the program, she said. The government project is aiming to have building societies set up within banks. The project is currently under parliamentary review.
The Constitutional Tribunal will try to end its probe into a bill curbing pension growth before the government details its 1996 budget later this month. The law, limiting pension growth next year to 2.5% in real terms, was sent to the Court by President Lech Walesa last week. Walesa, who earlier unsuccessfully vetoed the legislation, said it violated citizens' trust in the state and its laws because the measure was designed only for 1996 and pensions would have grown much more under current legislation. The fate of the law is crucial to the 1996 budget, because its scrapping would boost spending by about 5%, forcing the government to rewrite its budget plan.
Poland's expected surplus of 1.5 million tons of grain from this year's harvest is likely to be exported and much of it could go to the former Soviet republics. Grain production rose by 19% this year to 25.64 million tons and included 8.66 million tons of wheat and 6.31 million tons of rye, according to the central statistical office. Analysts said that Poland's domestic needs are about 24 million tons annually. Analysts said the big competitiveness of Polish prices from a few years ago was now diminishing as Polish grain prices crept increasingly closer toward world levels.
During this year's campaign the Agency for the Agriculture Market, which planned to buy four million tons of grain this year, bought wheat at zl. 340 ($140) per ton and rye for zl. 220 ($90) per ton.
Parliament's budgetary committee approved changes in next year's personal income tax, lowering its level for the poorest and increasing it for the better-off. The committee voted 14-4 with one abstention in favor of introducing in 1996 the progressive tax levels of 19%, 21%, 24%, 31%, 38% and 45%, depending on income. The government, which earlier stressed it preferred the tax to stay at the current levels of 21%, 33% and 45%, said the change of rates would not affect next year's budgetary revenues. Deputy Finance Minister Witold Modzelewski said 89% of the population should benefit from the new tax levels and 11% would face higher taxes.
