FinMin expects zero VAT on food from February 1

Mateusz Marek/PAP

Poland's finance minister has said he expects VAT to be zero on food products from February 1, with the change affecting all products currently subject to 5-percent VAT.

Tadeusz Koscinski told the public Polish Radio: "It is not yet official news but we have information that the European Commission will grant the request of Prime Minister Mateusz Morawiecki in the matter."

The finance minister went on to explain that the zero VAT rate may come into force from February 1 as time is needed to reset cash registers.

EU rules on VAT agreed by member states do not allow zero VAT on foods, with a directive permitting only a reduced rate, such as 5 percent.

According to PAP information from Brussels, the zero-rate VAT on foods foreseen by Poland will be possible under a new directive based on an agreement reached at a meeting of EU finance ministers on December 7 updating current VAT rules on goods and services.

The new rules give governments greater flexibility in setting tax rates. In order for them to come into force they need to be consulted with the European Parliament.

Koscinski said there were sufficient budgetary resources to extend a government 'anti-inflation shield' if necessary but said that now was not the time to amend the budget due to inflation. "We need to wait because it is very difficult to draw conclusions and forecast, we need to know whether inflation will be higher or it will decrease due to the reduction of VAT rates," he said.