The Polish finance ministry published on January 25 a long-awaited draft bill seeking to introduce a tax on retailers. The expected PLN2bn (€450mn) revenue from the tax will be used to cover the Law and Justice (PiS) government’s spending plans unveiled during its successful campaign ahead of elections in October.

The finance ministry insists the new tax - which, like a recently introduced levy on banking assets, closely resembles policies put in place by Hungary's controverisal Fidesz government several years ago - will not raise prices for consumers. Private consumption has been a cornerstone of Poland's economic recovery over the past year or so, and remains crucial as net exports struggle to offer much momentum.

The finance ministry did not specify when the new tax would enter into force, but has hinted it wants it to take effect as early as possible in 2016. Retail turnover of up to PLN300mn a month will be taxed at 0.7%, according to the draft, while anything over that threshold will be subject to a levy of 1.3%. Turnover generated on weekends and holidays will be taxed 1.9%.

Retailers not exceeding monthly turnover of PLN1.5mn will be exempt, a move that will favour small shops over large international retailers. Sales of pharmaceuticals and reimbursed drugs, meals prepared by the seller, as well as natural gas, water, heat and electricity will not be taxed.

The populist PiS has said it would like to see smaller local retailers compete with large, mostly foreign-owned, retail chains more effectively. Foreign-owned retailers operating in Poland include market leader Bedronka - owned by Portugal's Jeronimo Martins - as well as the UK's Tesco, France's Carrefour and Auchan and Germany's Kaufland and Metro.

PiS’ flagship spending programme, a monthly benefit of PLN500 per every second and subsequent child, is expected to cost the budget up to PLN17bn in 2016, and then rise to over PLN20bn the following year. To cover this, and other costs such as the lowering of the retirement age in the second half of 2016, the government also plans to introduce a bank tax from February.