Poland targets €350mn annual windfall as it finally outlines retail tax proposal

By bne IntelliNews May 24, 2016

Poland hopes to reap PLN1.53bn (€345mn) for the state budget from its planned retail tax, the finance ministry said on May 24.

The government finally tabled its proposal for the levy on retail turnover on May 23. The ruling Law & Justice (PiS) is hunting revenue to power the flagship spending programmes it promised during its successful campaign for the election in November 2015, several of which have been delayed by mounting concern over fiscal management. Meanwhile, the tax threatens to have a spillover effect for Poland's farmers and food processors, who are already under pressure.

The finance ministry proposes to tax retail turnover exceeding a monthly cap of PLN17mn. Monthly turnover of PLN17-170mn will be taxed 0.8%, while that exceeding PLN170mn per month will be covered by a 1.4% tax rate, the ministry said in a statement.

The ministry forecasts the tax will net PLN638mn for the budget in 2016. The projected revenue from the tax in 2017 and beyond is expected at PLN1.53bn annually. 

The proposal will now be discussed by government, and then by the PiS dominated parliament. Analysts say they expect the levy will not be implemented September, as companies will have to adapt to the new environment.

Commodities such as natural gas or coal, fuels used for heating, as well as water, and medicines will be exempt from the tax, the ministry said. Sales over the internet will not be taxed. Companies paying the tax will also be entitled to deduct payments from their corporate income tax base.

The retail tax is also a measure to protect Polish retailers in a market increasingly dominated by large foreign-owned chains, the government claims. A similar tax was introduced in Hungary, only for the European Union to strike it in 2015 as unlawful. That has had Warsaw working carefully to avoid a similar fate for its levy.

Analysts at Erste predict that the largest retailers will be able to pass much of the cost of the new tax onto suppliers. That will not go down well with Poland's farmers and food processors, who are already under pressure due to the Russian embargo on EU food imports.

Related Articles

Speculation over a second downgrade grows as S&P drops outlook on Polish economy

Speculation that Poland could suffer a second downgrade of its sovereign rating at the end of the week intensified on January 10, as Standard & Poor’s lowered its estimates on economic growth. ... ... more

Polish government offers temporary olive branch in parliament standoff

Polish media were temporarily readmitted to parliament under the old lax rules on January 5. The ruling party Law and Justice (PiS) had sought to place restrictions on reporting in December, ... more

Poland preparing to push lenders into conversion of forex loans

Poland is preparing a set of “supervisory and regulatory mechanisms” to push banks into restructuring their forex loan portfolios, the National Bank of Poland (NBP) said on January 2. A ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss