Tax agreement between PiS and PO

The two winning parties of last month's parliamentary elections, Law and Justice (PiS) and Civic Platform (PO), have agreed to repeal taxes on personal savings and stock-market profits introduced by the outgoing leftist administration, senior members of the two parties said.

Currently the tax for interest earned on bank account savings and profits on the Warsaw Stock Exchange is 19 percent. The proposed cuts could come as early as 2007.

"We want to draw up all tax changes, including the liquidation of the tax on savings, within three months of forming the government," PiS' candidate for Prime Minister Kazimierz Marcinkiewicz told the Polish press. "This would mean they come into effect from the start of 2007."

Marcinkiewicz's party, the conservative PiS, has clashed with the pro-business PO, its likely coalition partner, over campaign promises on sweeping tax reforms, as the presidential campaign has overshadowed talks on forming a government.

But Civic Platform economic-policy expert Zbigniew Chlebowski said the party fully supported the idea of removing the savings tax.

"We are absolutely in favor," he told Polish jouralists. "The income from this tax for the budget is minimal [and the tax] made Poles withdraw their savings from banks." (Reuters)