Tax amnesty rate likely to settle at 12% following Parliamentary vote

Yesterday Parliament approved a contested tax amnesty bill proposed by the government to curb the shadow economy which has cost the state billions of zloty in unpaid revenues. The bill was approved by 221 votes with 155 opposing and three abstentions. To become law, the measure still has to be cleared by the Senate and then signed by the President. The bill has been strongly criticized by opposition deputies who said it was rewarding tax dodgers allowing them to come clean on taxes owed from 1996-2001 at a fraction of the 75% fine they would pay if they were caught. Partially addressing that issue, Members of Parliamentary increased the rate which must be paid by repentant tax evaders to 12% from the 7.5% proposed by the government. Based on the lower figure the Finance Ministry estimated proceeds from the amnesty at zl. 600 million, a sum too small to make an impact on the planned zl. 38.7 billion budget deficit next year. Some analysts have criticized the bill saying the amnesty may treat the symptoms and not the cause of tax avoidance which has pushed up state borrowing and forced unemployment over 17% as people increasingly opt to work for cash in hand. Under the bill individuals will also be required to declare their worldwide income and assets in full, exposing them to the full force of Poland's steeply progressive income tax system. (Reuters)