New Polish Government Makes Promises On Tax

by Ulrika Lomas, Tax-News.com, Brussels

25 September 2001

According to exit polls, Polish left-wing party the Democratic Left Alliance won a majority in parliamentary elections Sunday, and promised not to impose a raft of new taxes, despite a looming budget deficit left behind by the previous government which will force the new government to impose an austerity plan.

Exit polls by the private polling agency PBS showed the Democratic Left bloc with 44.9% of the vote, representing 231 seats out of 460 in total. "This means a great responsibility for us," said party leader Leszek Miller, who is poised to become Poland's next prime minister. "The outgoing government is leaving a lot of outstanding problems that need to be dealt with."

Marek Belka, expected to become finance minister in the new cabinet, said: 'We won't make any savings on annuities and pensions, we won't raise VAT and we won't tax people's savings.' Issuing a fair-sized troop of hostages to fortune, Belka said:

• 'No savings will be made on annuities and pensions. I can assure you that the next year's revision of these payments will be done according to the principles in force.
• 'The tax on food will not be raised, therefore, food prices will not go up.
• ' I do not intend to tax people's savings. I am merely considering to tax some of the revenues they bring. It will be still worth keeping saving accounts in Poland.
• ' We will look for revenues in the grey zone, among the people who cheat the state and the society; into dishonest privatizations; in over-inflated bureaucracy, and not into the pockets of honest citizens.
• ' I sustain my previous statement that my programme will ensure annual 5-per cent economic growth. There will be more work, more money and more dignity in Poland," Belka wrote in his statement.

One can only wish him good luck; at least he didn't say, 'Watch my lips', or anyway not in translation.

The chairman of the Polish National Bank told an Internet chat on the Gazeta Wyborcza website yesterday that he expects good cooperation in ordering the public finances. Commenting on Belka's economic plan, Leszek Balcerowicz said it is too early to tax interest on household savings and capital gains, and added that Belka should rather focus on spending rationalization. "I think that a capital gains tax is not a good solution," the NBP head said.

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