Poland may extend zero VAT on food into 2024 if inflation persists

WARSAW, May 6 (Reuters) – Poland may extend zero VAT rate on food staples into 2024 if inflation persists, Prime Minister Mateusz Morawiecki said on Saturday.

Poland slashed taxes on a long list of products from fuel to fertilizer to help consumers cope with surging inflation, but had to return to higher taxes on gasoline this year in line with European Commission rules. However, Brussels has allowed VAT on food staples to be kept at zero.

While inflation slowed to 14.7% in April from 16.1% in March, according to a flash estimate from the statistics office, it remains a key political issue in the run up to a general election this year.

“If inflation doesn’t fall very significantly, it’s not excluded that in the fourth quarter of this year we will make a decision to extend this relief for the next year,” Morawiecki told a news conference.

The decision will be made when inflation data for this year and forecasts for 2024 will be available, the prime minister said, adding that the measure costs around 10 billion zlotys ($2.41 billion) a year in lost budget income.

($1 = 4.1468 zlotys)

Reporting by Marek Strzelecki Editing by Peter Graff

Our Standards: The Thomson Reuters Trust Principles.

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