Kolodko rules out flat rate taxes

Personal and corporate income taxes will not be cut until the economy enters a clear period of recovery, Finance Minister Grzegorz Kolodko said yesterday. Kolodko also ruled out replacing the country's steeply progressive income tax system with a flat rate, similar to that of Russia, as sought by some businesses and economists. "I am in favor of common-sense economics and a reasonable tax system supports capital formation, but also fulfills the important function of redistribution," he told public radio. When asked whether he would consider introducing a flat tax he said: "No". Business lobbying groups have called for tax cuts or flat tax to give them some breathing space. But Kolodko said taxes would for now remain at current levels while the economy recovers from its deepest slowdown in a decade and repeated a plea to the Central Bank to continue lowering interest rates instead. (Reuters) A.C.