Mixed feelings

Experts from the Polish Confederation of Private Employers (PKPP) Lewiatan say the reforms of the VAT, CIT (corporate income tax) and PIT (personal income tax) proposed by the Finance Ministry only partially achieve the numerous recommendations made by experts called in by the Ministry at the beginning of 2006 to re-evaluate the tax system.

The new definition of economic activity in the VAT and PIT drafts, the extension of the tax office's ability to audit companies and the encumbrances in the use of a binding tax interpretation were the proposals which received the strongest criticism.

Henryka Bochniarz, president of PKPP Lewiatan, says that the range of changes in the system is narrower than the one announced by the Finance Ministry in March and April. According to Bochniarz, the changes could increase the costs of economic activities.

"That's not what the government wants, since the fight with unemployment and support for entrepreneurship is one of the basic aims of its policy," says Bochniarz.

The group also criticized the government's proposal to liquidate the 10-percent rebate on donations to non-profit organizations.

PKPP said there have also been positive changes, but employers were hoping for more. They expected the government to decrease the amount of VAT bureaucracy faced by companies that export products abroad, and speed up VAT returns.