Parliament prolongs anti-inflation measures, keeps higher VAT rates

The Sejm, the lower house of the Polish parliament, has decided to keep lower taxes on certain goods till the end of the year to combat inflation and prolong elevated VAT rates to finance defence spending.

The government's laws concerning lower taxes on fuels, energy, staple foods, natural gas and electricity were introduced in December 2021 and February 2022 owing to high inflation. They have already been prolonged twice as Russia's war against Ukraine added fuel to inflation.

Two more months, November and December, of the anti-inflation measures will cost the budget an additional PLN 4.8 billion (EUR 1.02 billion).

Three hundred MPs supported the prolongation, four were against and 144 abstained.

Additionally, the lower house decided to keep higher VAT rates, at 8 and 23 percent, in 2023 and the following years, until Poland's defence expenditure exceeds 3 percent of the country's GDP.

In 2011, the previous government raised the main VAT rate to 23 percent from 22 percent and the secondary rate to 8 percent from 7 percent. It also introduced a new 5 percent rate for basic foodstuffs. The government initially promised to return to lower rates after a three-year period of extraordinary measures, but they have remained in force ever since.