Introduction of value-added tax causes concern in the construction sector

Introduction of value-added tax causes concern in the construction sector Sejm will discuss a controversial proposal to increase selected value-added taxes (VAT) as soon as its next sitting. The amendment was evaluated in Sejm for about two months and was finally accepted in July. The proposal introduces or increases VAT rates on goods and services which, because of their social importance, enjoyed preferred rates. This includes introducing a 22% VAT by 2003 on apartments, increasing the VAT on construction materials and services from 7% to 22% in three years and introducing a 7% VAT on newspapers next year. According to the government, this will make Polish law compatible with the European Union (EU) and generate an extra of zl. 1.7 billion in revenue next year. The Democratic Left Alliance (SLD), Polish Peasants Party (PSL) and construction lobby are against the VAT increase on apartments and construction goods and services. According to the lobby, the changes and elimination of the construction tax break would lead to a crash in construction of apartments. (Gazeta Wyborcza, page 21)