Poland to cut taxes to soften inflation blow, says PM

Economic Indicators6 minutes ago (Nov 25, 2021 05:51AM ET)

(C) Reuters. FILE PHOTO: People visit a shopping centre, which was reopened after the coronavirus disease (COVID-19) restrictions were eased in Gdansk, Poland, February 1, 2021. Bartosz Banka/Agencja Gazeta via REUTERS

WARSAW (Reuters) – Poland will cut taxes on petrol, gas and electricity and provide cash payments to households in a programme worth up to 10 billion zlotys ($2.40 billion) designed to help Poles deal with high inflation, the prime minister said on Thursday.

Inflation in emerging Europe’s largest economy has hit levels not seen in two decades. This has strained household budgets and caused headaches for a government that takes pride in its record of boosting the spending power of ordinary Poles with generous social benefits and increases in the minimum wage.

“The Polish government is acting to… soften, buffer against this growth in inflation,” Mateusz Morawiecki told a news conference.

Tax on petrol will be lowered to the minimum allowed by the European Union for five months starting on Dec. 20, he said.

Value-added tax (VAT) on gas will be cut to 8% from 23% from January to March. VAT on electricity in the first three months of 2022 will fall to 5% from 23%.

Additionally, households will receive financial support in the form of payments that will depend on income and which will be made in two installments in 2022.

Governments across Europe and beyond are facing similar inflation pressures due to higher global energy prices and supply chain disruptions caused by the coronavirus pandemic and the lockdowns it prompted.

($1 = 4.1589 zlotys)

Poland to cut taxes to soften inflation blow, says PM

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