Outcome of VAT rate on agricultural products will have little budgetary impact

Introducing zero value-added tax (VAT) rate on unprocessed agricultural produce will have no bearing over the level of the budget deficit in 2001 said Finance Ministry spokeswoman Aleksandra Gieros. However, "The Finance Ministry assumes parliament will pass a 3% rate," she added. This view is being supported by deputies across the political spectrum, who maintain that if a zero VAT rate is passed it will still be outstripped by the planned VAT hikes on other products and services, such as the 12% rate on construction materials. The government could force the bill through If it persuades the populist arm of its Solidarity Electoral Action (AWS), and resist the farmers lobby. (Prawo i Gospodarka, page 8) P.S.