Government touts tax breaks
According to Gazeta Wyborcza, the Finance Ministry intends to exempt corporate income earmarked for investment from taxation. It hopes that this will attract foreign investment and foster entrepreneurship, which could help reduce the budget deficit.
The ministry also plans to introduce some changes to value-added and personal-income taxes in 2005-2008. Although the current leftist government is expected to lose power during this year's general election, it may still have to prepare next year's budget, which the new government will have to implement.
Under current criteria, the budget deficit must remain below three percent of GDP for Poland to qualify for eurozone entry. However, a change in how transfers to pension funds are accounted for has inflated the budget deficit, making meeting the single-currency criteria highly unlikely.
The government is lobbying the EU for a change in how it interprets these limits. (Reuters)
The ministry also plans to introduce some changes to value-added and personal-income taxes in 2005-2008. Although the current leftist government is expected to lose power during this year's general election, it may still have to prepare next year's budget, which the new government will have to implement.
Under current criteria, the budget deficit must remain below three percent of GDP for Poland to qualify for eurozone entry. However, a change in how transfers to pension funds are accounted for has inflated the budget deficit, making meeting the single-currency criteria highly unlikely.
The government is lobbying the EU for a change in how it interprets these limits. (Reuters)
