Poland's Government Faces First Test With Tax Amendment Plans

by Ulrika Lomas, Tax-News.com, Brussels

06 November 2001

Poland's new coalition government is facing its first political test this week as it attempts to pass through parliament a series of personal income tax amendments to raise PLZ4 billion for next year's budget revenue. In order to meet deadlines set out by the constitution the government must finalise the amendments before the end of November.

'Passing the tax bills through parliament will be viewed as the first test of the effectiveness of the new government. If amendments are passed this week the zloty will rise, if not the currency will likely weaken,' said Piotr Bielski, an analyst at bank PKO BP in Warsaw.

At present the Polish zloty is standing weak against the dollar and fairly strong against the euro. Investors are watching with interest Argentina's attempt to reorganise its foreign debt. 'There still a large deal of uncertainty given the Argentine debt issue, but any negative shocks caused by bad news from there would be cushioned by a positive perception of Poland's new government,' said Bielski.

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