Rates of change in tact

The leader of the Law and Justice (PiS) parliamentary club, Przemysław Gosiewski confirmed that the Finance Ministry's changes in the tax law include introducing two tax rates in place of the existing three. He made assurances that PiS has not withdrawn from its pre-election promise of the two tax rates of 18 and 32 percent.

These changes could be introduced as soon as next year. "We are waiting for the Finance Minister's evaluation. The time of introducing the changes and the thresholds will depend on the calculations," Gosiewski said. Currently there are three tax rates - 19, 30 and 40 percent.

This decision comes as a surprise, as since its election victory, PiS has been saying that any change of tax rates would significantly reduce its income. Recently, deputy Finance Minister Mirosław Barszcz said that new tax rates would have to be put off until 2008 if not later.

PiS' election plans envisaged the threshold at zł.80,000, which would mean 98 percent of tax payers would pay the 18-percent rate and the state budget would decrease by zł.5-6 billion. But now there are rumors that the government intends to lower the threshold to around zł.60,000. The change would eliminate all existing tax breaks except family allowance.