Income tax for farmers

Civic Platform has the agreement of its coalition partner, the Polish Peasants' Party, to levy an income tax on farmers, according to the Rzeczpospolita daily. Farmers are generally exempt from both personal income tax (PIT) as well corporate income tax (CIT), paying land tax (podatek gruntowy) instead.

"The coalition wants a uniform retirement-tax system," Deputy Finance Minister Katarzyna Zajdel-Kurowska told Rzeczpospolita. "The current state [of the system] is difficult to maintain further. It's dangerous for future expenditures from the budget."

The government has yet to reveal further details on the income tax reform, and according to Zajdel-Kurowska the new system will not be implemented without careful research. One of the most difficult issues is accurately estimating farmers' incomes in order to tax them fairly.

In January the government unveiled the first of its attempts at agricultural reform, an initiative to tie the amount which farmers pay into the Agricultural Social Insurance Fund (KRUS) to the amount of land cultivated and the size of their profit. Farmers are the only professional group which does not pay general social insurance (ZUS). The first stage of KRUS reform is expected to take effect in 2009.