Government not abandoning possibility of increased VAT in construction

The government is not abandoning the idea of a gradual increase in Value Added Tax (VAT) rates in construction materials and services from the current 7% level to 12% in 2001, 17% in 2002, and 22% in 2003. The amendment to the bill, which would mean an extra zl. 1 billion for the budget, should be filed with the Sejm in a few days. "We will be defending the 2001 VAT rate increases," said finance vice-minister Jan Rudowski. He said, however, that it is possible that VAT rates for future years could be negotiated. In related news, the government yesterday rejected a proposal for an amendment to the goods and services tax and the excise duty, saying they are incompatible with Poland's negotiation position with the European Union (EU).(Rzeczpospolita, p.B1)