Now you see it ...
It was supposed to be kept secret, but eventually even the author, Grzegorz Kołodko, could not help revealing snippets of what his fiscal reform plan contained.
Prior to a cabinet meeting on Monday, the finance minister would say little more than that his proposals included a tax cut designed to stimulate growth. "Perhaps with lower taxes we can collect more," Kołodko commented. It was widely believed that the elimination of most tax breaks was also on the cards.
Even after the meeting, ministers remained tight-lipped - anxious, it was believed, not to reveal any initiatives that might prove unpopular before the EU referendum. Government sources described the 13-chapter document presented by Kołodko to his colleagues as a "preliminary draft."
While the finance ministry insisted the plans would not be revealed until mid-March, speculation was rife that Kołodko had suggested an across-the-board 2% cut in personal tax rates, coupled with the widely anticipated reduction in tax breaks. Kołodko himself hinted he might have some good news for the country's poor. "We are considering various options ... Under one, a zero tax rate would apply for the poorest," he said. An alternative, he went on, might be to reduce the lowest tax level from its current 19%. However, he denied that, at the other end of the scale, a 50% tax rate for the super-rich was being considered.
Whatever the details of Kołodko's proposals, the underlying theme of the fiscal reform package was making the national budget more flexible to prepare the country for EU accession next year and the subsequent adoption of the euro currency. By the end of the week the finance ministry was claiming that the country was on course for joining the euro by 2006. The claim was based on a prediction that the budget deficit would fall to 2.9% of GDP in 2006, below the 3% laid out in the Maastricht Treaty. Economic growth was predicted to rise to 4.9% next year from 3.5% this year, and to 6.0% in 2006.
Kołodko also revealed that a capital gains tax would be introduced, saying, "The exemption expires at the end of this year. And when it expires, rules which were set some time ago will apply."
However, the ministry set itself on a collision course with the NBP, by indicating that its fiscal reform plans envisage using part of the central bank's €6.5 billion (zł. 27 billion) paper provisions to boost the national budget. Monetary Policy Council member Janusz Krzyzewski said that a potential release of the provision was risky in terms of creating additional money supply. He added, "Such a release would be in violation with the law, as it was not a part of the MPC's monetary policy guidelines for this year or years to come, which under the constitution are binding for the central bank."
Prior to a cabinet meeting on Monday, the finance minister would say little more than that his proposals included a tax cut designed to stimulate growth. "Perhaps with lower taxes we can collect more," Kołodko commented. It was widely believed that the elimination of most tax breaks was also on the cards.
Even after the meeting, ministers remained tight-lipped - anxious, it was believed, not to reveal any initiatives that might prove unpopular before the EU referendum. Government sources described the 13-chapter document presented by Kołodko to his colleagues as a "preliminary draft."
While the finance ministry insisted the plans would not be revealed until mid-March, speculation was rife that Kołodko had suggested an across-the-board 2% cut in personal tax rates, coupled with the widely anticipated reduction in tax breaks. Kołodko himself hinted he might have some good news for the country's poor. "We are considering various options ... Under one, a zero tax rate would apply for the poorest," he said. An alternative, he went on, might be to reduce the lowest tax level from its current 19%. However, he denied that, at the other end of the scale, a 50% tax rate for the super-rich was being considered.
Whatever the details of Kołodko's proposals, the underlying theme of the fiscal reform package was making the national budget more flexible to prepare the country for EU accession next year and the subsequent adoption of the euro currency. By the end of the week the finance ministry was claiming that the country was on course for joining the euro by 2006. The claim was based on a prediction that the budget deficit would fall to 2.9% of GDP in 2006, below the 3% laid out in the Maastricht Treaty. Economic growth was predicted to rise to 4.9% next year from 3.5% this year, and to 6.0% in 2006.
Kołodko also revealed that a capital gains tax would be introduced, saying, "The exemption expires at the end of this year. And when it expires, rules which were set some time ago will apply."
However, the ministry set itself on a collision course with the NBP, by indicating that its fiscal reform plans envisage using part of the central bank's €6.5 billion (zł. 27 billion) paper provisions to boost the national budget. Monetary Policy Council member Janusz Krzyzewski said that a potential release of the provision was risky in terms of creating additional money supply. He added, "Such a release would be in violation with the law, as it was not a part of the MPC's monetary policy guidelines for this year or years to come, which under the constitution are binding for the central bank."
