A drop in VAT rates in 2016 may be possible if VAT revenue increases and government plans to combat the shadow economy are successful, Poland’s finance minister Mateusz Szczurek has mooted.
Szczurek said that VAT revenue wildly varies, and while a stronger economy spurs on VAT revenue, a drop in domestic demand causes a drop in VAT revenue. As such the decision on whether to lower VAT in 2016 depends on the country’s economic growth, the finance minister underlined.
A lot also depends on whether the government will be able to crack down on the shadow economy. “If the plans are successful to limit the shadow economy and improve recoverablility, then there will be no reason not to lower VAT in 2016,” Szczurek said.
The announcement comes as the government’s multi-annual financial plan for 2013-2017 caters for a lowering of the higher VAT rate from 23 percent to 22 percent in 2017. In 2011 VAT rates were hiked by 1 percent to 8 percent and 23 percent respectively.