Less taxing times
Finance Minister Mirosław Gronicki has outlined the government's top fiscal priorities this year-and suggests lower taxes are one of the key targets.
"There is a consensus that significant changes to the tax system are a must," he told a meeting of investors last week, adding that the government plans to expand the tax base this year, "which could mean that taxes will be lower."
The changes will probably come in the form of streamlining the country's labyrinthine tax code. Major alterations (such as the implementation of a flat tax) are not on the cards.
"We don't want to offer revolutionary changes, because more changes mean more shock for [businesspeople]."
The government believes their plans will be bolstered by strong growth this year.
However, Gronicki cautioned that he sees some real challenges to tax reform, such as the "huge" budget deficit as well as the country's massive "social transfer" or welfare obligations, which consumed seven percent of GDP last year.
The Minister also offered up plans for addressing major economic challenges facing the country, such as the nagging problem of cheap used cars flooding across the country's borders and ruining auto sales.
"We are eliminating excise tax on all imported cars. There will be a registration fee imposed based on the size of the engine." He said that new registrations of imported cars would cost drivers one złoty per cubic centimeter of engine.
Those hoping for more drastic measures were disappointed.
"We cannot interfere with consumer choice," he said. "The only thing the government can do is impose this fee and hope the customs officers don't allow a complete wreck into the country."
The solution met a lukewarm reception. David Flanagan, director of sales and marketing for GM Poland, said the government should have seen the crisis coming.
"They've taken the right action, but too slowly. This problem was anticipated in sister countries, and they managed to avoid it."
Gronicki also responded to criticism from Brussels over revelations that debts from Poland's open pension fund system mean that the deficit will not fall below three percent by 2009. According to him, revealing the liabilities is Poland's first step on the road to reforming the system.
"When a country is reforming the system, it should not be punished. What is better," he asked, "to show or to hide?"
"There is a consensus that significant changes to the tax system are a must," he told a meeting of investors last week, adding that the government plans to expand the tax base this year, "which could mean that taxes will be lower."
The changes will probably come in the form of streamlining the country's labyrinthine tax code. Major alterations (such as the implementation of a flat tax) are not on the cards.
"We don't want to offer revolutionary changes, because more changes mean more shock for [businesspeople]."
The government believes their plans will be bolstered by strong growth this year.
However, Gronicki cautioned that he sees some real challenges to tax reform, such as the "huge" budget deficit as well as the country's massive "social transfer" or welfare obligations, which consumed seven percent of GDP last year.
The Minister also offered up plans for addressing major economic challenges facing the country, such as the nagging problem of cheap used cars flooding across the country's borders and ruining auto sales.
"We are eliminating excise tax on all imported cars. There will be a registration fee imposed based on the size of the engine." He said that new registrations of imported cars would cost drivers one złoty per cubic centimeter of engine.
Those hoping for more drastic measures were disappointed.
"We cannot interfere with consumer choice," he said. "The only thing the government can do is impose this fee and hope the customs officers don't allow a complete wreck into the country."
The solution met a lukewarm reception. David Flanagan, director of sales and marketing for GM Poland, said the government should have seen the crisis coming.
"They've taken the right action, but too slowly. This problem was anticipated in sister countries, and they managed to avoid it."
Gronicki also responded to criticism from Brussels over revelations that debts from Poland's open pension fund system mean that the deficit will not fall below three percent by 2009. According to him, revealing the liabilities is Poland's first step on the road to reforming the system.
"When a country is reforming the system, it should not be punished. What is better," he asked, "to show or to hide?"
