Polish VAT rate cut delay due to COVID-19
- Aug 24, 2020 | Richard Asquith
A plan to cut Polish Value Added Tax from 23% to 22% is likely to be shelved this week due to the uncertain economic effects of the coronavirus pandemic.
The withdrawing of the planned cut, scheduled for 2021, reflects continuing uncertainty around the country’s economic performance during the medical crisis and the government needing to maintain its spending firepower to support a drop in private spending and investment. The amendment to withdraw the cut talks about any future reduction only coming when linked with a permanently sound budget.
Poland originally increased its VAT rate by 1% to 23% in January 2011 to help balance government finances during the financial crisis. The plan to restore the rate to 22% has been pushed back several times since 2015 when Poland left the EU’s excessive budget deficit procedure.
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