The European Commission has announced the commencement of an illegal state aid procedure regarding the retail trade tax which has been in force since early September, potentially leading to its suspension. – The trade tax is the most problematic tax issue for the government. Its scope has been restricted after protests in the sector, particularly in small-scale retail, meaning that the resulting income from this tax has dropped by 1 bln PLN. Should the new tax be fully put in question by the EC, budget income would decrease by a further 1.5 bln PLN. Given the failed attempts to introduce a hypermarket tax in Hungary, one could hardly expect a different outcome – says Łukasz Kozłowski, expert of Employers of Poland.
The impact of such a decision on the budget should not be serious. The tax in question would only be in force in the last 4 months of 2016 anyway, and the realization of the budget goes much better than expected. As indicated by figures presented by the Ministry of Finance, at the end of August the budget deficit was merely 14.9 bln PLN: 27.3 percent of the annual plan. However, the impact of such a change may be much more detrimental when it comes to next year’s budget. The deficit planned for 2017 is on the verge of safety, which means that the margin for corrections caused by any possible changes in income or spending is very restricted.
Łukasz Kozłowski, economic expert of Employers of Poland