Sejm to decide on ag sector VAT
The Sejm is expected to make a final decision this month about when value-added tax (VAT) will be levied on unprocessed agriculture goods and at what rate.
In a heated joint session of the Sejm's agriculture and public finance committees last week, parliamentarians rejected a Senate vote from June to introduce the VAT tax in agriculture at a 3% rate. In a 29-11 vote last week, committee members upheld the Sejm's earlier decision to usher in VAT on unprocessed farm products such as fish, honey, fruits and animals at a 0% rate.
However, parliamentarians supported the Senate's initiative calling for the VAT tax to come into effect on Sept. 4. "This is really good information," said Romuald Buczkowski, office director of the Wielkopolska agriculture chamber.
The long-awaited introduction of an agriculture VAT law would make Polish tax laws compliant with European Union (EU) regulations. It would also allow farmers to claim deductions from VAT taxes that they have already paid on purchases of supplies or other goods used in the production process.
Originally earmarked for introduction by today, the debate over the initial rate for the tax blocked the bill from moving out of the Sejm through much of the winter.
Arguing that a 0% rate will prolong the integration of the tax system used in the EU, the government, the Finance Ministry and other deputies have been pushing for an initial 3% rate. Moreover, financing the return of VAT paid out by farmers at a 0% rate could cost the government up to zl. 1.3 billion ($295 million) a year, the Finance Ministry said.
