Opposition repels govt's plan to introduce 3% VAT in agricultural sector

Backed by 29 Solidarity Electoral Action (AWS) deputies, the opposition repelled on Friday the government's plans to introduce 3% VAT on unprocessed agricultural products. According to the Finance Ministry, the budget may lose zl. 1.3 billion as a result of the vote. Leaving VAT rates unchanged means offering no chance for any pro-family tax breaks, said Finance Minister Leszek Balcerowicz following the voting. Opponents of the bill, however, believe the current rate is beneficial to farmers as it allows them to deduct VAT on items purchased for agricultural production, which lowers costs as a result. Voting on the plan had been postponed since the beginning of March, as the coalition was trying to round up the majority needed to approve the bill. (Gazeta Wyborcza, May 13-14, page 1; Prawo i Gospodarka, page 1) P.S.