Polish PM announces new tax cuts to curb inflation

Poland’s government on Tuesday adopted a package of new anti-inflation measures, including a reduction in value-added tax on food, fuels, natural gas and fertilisers, the state PAP news agency reported.

Polands Prime Minister Mateusz Morawiecki meets with reporters to announce new tax cuts to combat inflation, in Warsaw on Tuesday.

Poland’s Prime Minister Mateusz Morawiecki meets with reporters to announce new tax cuts to combat inflation, in Warsaw on Tuesday.PAP/Marcin Obara

“Under our second anti-inflation shield, we are introducing new measures which will be in force for six months, starting on February 1,” Prime Minister Mateusz Morawiecki told reporters. 

“We are reducing VAT on fuels from 23 percent to 8 percent,” he said, adding that the move “will cause a fundamental change in prices.”

Morawiecki said fuel would become cheaper by PLN 0.60-0.70 (EUR 0.13-0.15) per litre, a cut expected to be seen at the pump in three to four weeks. 

Meanwhile, VAT on food will be cut from 5 percent to 0 percent, Morawiecki announced. He estimated the reduction would cost state coffers from PLN 6 billion to PLN 7 billion (EUR 1.3 billion to EUR 1.5 billion).

“I call on all food traders to reduce prices accordingly,” Morawiecki said, predicting that food prices should go down next month. 

In addition, VAT on natural gas and fertilisers will be slashed to 0 percent, while previous reductions in VAT on electricity and heat will remain in effect for a further four months, Morawiecki told a news conference.

Anti-inflation measures worth up to EUR 4.3 billion

All these reductions combined are expected to cost the government between PLN 15 billion and PLN 20 billion (EUR 3.3 billion to EUR 4.3 billion), Morawiecki told reporters.

He said that new tax rules under his conservative government’s Polish New Deal initiative, coupled with the latest anti-inflation measures, would “positively affect the budgets of Polish families.”

Morawiecki estimated that reduced VAT on food would bring Polish households an additional PLN 45 (EUR 9.90) in savings a month, while all the new anti-inflation measures combined would leave them with an extra PLN 100 (EUR 22) to spend a month, the PAP news agency reported.  


Source: PAP, IAR, TVP Info

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