Lowering the rates of value added tax (VAT) by 1 percentage point. would mean a cost for the budget estimated at around PLN 14.4 billion in 2023 and PLN 15.4 billion in 2024, reported Magdalena Rzeczkowska, Minister of Finance.
“The war situation prompted the government to decide to increase defense spending to 3% of GDP, additionally these are long-term investments. Therefore, maintaining VAT at 23% and 8% is necessary. The estimated cost of such a reduction in 2023 would be approx. PLN, PLN 4 billion, and PLN 15.4 billion in 2024. Nevertheless, our goal is to constantly reduce taxes, as was the case with CIT, PIT, or the use of tax reliefs or shields,” Rzeczkowska said during a press conference in Karpacz.
In the draft amendment to the act on corporate income tax adopted by the government in August, it was announced today that the government plans to maintain the increased VAT rates at the level of 8% and 23% in 2023 due to the planned surge in defense spending and makes their maintenance dependent on 1%. January 2024 after total defense expenditure exceeded 3% of GDP.
In 2010, VAT rates were temporarily increased by 1 percentage point. (from 22% to 23% and from 7% to 8%). The increased rate was initially to apply from 1 January 2011 to 31 December 2013. However, since then, its validity has been extended several times.
Source: ISBnews
