Poland VAT cut
Today Poland’s ruling Civic Platform (PO) party announced plans to lower the VAT rate from 23% to 22% starting from the 1st of January 2016. The VAT rate was raised in 2011 to raise budget income during the financial crisis, when its GDP reached 10%, a rate of 3% or lower is required to stay in the Euro currency. However Poland fared well during the financial crisis being one of the only countries not to go into recession, and latest figures show that it could now reach the Euro currency figure comfortably, with the PO currently being pro-EU. This drop in VAT is expected to affect the budget as bringing it down by 1 percentage point will cost the budget an estimated 5 to 6 billion zlotys.
However nothing is yet set out as there will be a general election in October and the PO’s current strongest competition has not laid out any plans for a VAT cut but have proposed plans to stay out of the Euro zone.