Higher VAT rate on construction materials likely to result in surging grey imports

"I expect we will face several months of stagnation following accession, in the [construction materials] sector. Right now it is difficult to estimate whether sales will decline by 30% or by 50%," said Bogdan Panhirsz, director of Polish Building Supplies (PSB), the nation's largest sector company. Many Poles are likely to head to Germany or, even more likely, to the Czech Republic, Slovakia and Lithuania to buy building materials. The Czech Republic will be particularly attractive, with a preferential 5% VAT rate on building materials which will remain in force until the end of 2007. (Parkiet, p. 1) T.J.