Government plans new controversial import tax to curb budget deficit

Economy Minister Janusz Steinhoff said on Friday that the government would not agree to a budget deficit higher than zl.34-36 billion, although initial Finance Ministry estimates put the gap at as much as zl.90 billion. According to Rzeczpospolita, the Ministry has calculated that if taxes are not raised, and if all new laws increasing spending were to be approved by Parliament, the deficit would amount to around zl.90-95 billion in 2002, as compared with the planned deficit of zl.29.1 billion this year. In order to lower the deficit to an acceptable level of zl.34-36 billion, the government is considering such radical measures as introducing an import tax, as well as suspending indexation of public sector salaries and pensions, meaning that their real value would deteriorate. However, the introduction of an import tax would mean breaching declarations Poland made not to introduce any new trade barriers it joined the Organization for Economic Cooperation and Development (OECD). (Rzeczpospolita, Aug. 11-12, pp.B1, B2) T.J.