Senate committee votes to suspend retail tax until 2019

The members of the Senate’s Budget and Public Finance Committee unanimously voted in favor of suspending the retail tax for another year, until the end of 2018. The work on the retail tax bill will continue. “We have prepared a budget bill that has a much lower deficit than the one planned for this year. We planned for PLN 59.3 billion, in the new one we’ll have PLN 41.5 billion,” said Deputy Finance Minister Wiesław Janczyk. In view of that, the tax was not “a significant revenue source. … The tension raised by various retail organizations … was incomparable to the benefits to public finances that arise from the levy,” he stated. The retail tax was first introduced in September 2016, introducing two tax rates: 0.8 percent for monthly revenue between PLN 17 and 170 million, and 1.4 percent for revenue exceeding PLN 170 million. It was however suspended in November 2016, after the European Commission raised a question whether the tax infringed upon EU regulations on public aid. In June 2017 the EC issued its final decision stating that the tax was indeed in violation with EU law.