Zero VAT on food to cost state budget EUR 1.87 next year

Poland could lose billions of zlotys in VAT revenue owing to maintaining a zero-rate VAT tariff on some foodstuffs.

According to an impact study included in a draft bill on a related VAT matter, the state could lose PLN 8.7 billion (EUR 1.87 bln) in VAT receipts in 2023 due to keeping a zero VAT rate on food staples until the end of June 2023.

The Polish government introduced the cuts as part of a shield to combat rising inflation.

Under the shield, VAT on food products was cut to zero percent from the standard 5-percent rate.

On Tuesday, Mateusz Morawiecki, the prime minister, said that Poland would keep a zero VAT rate on food in the first half of 2023. He estimated the cost to be borne by the state budget at "some PLN 8 billion (EUR 1.72 bln), or above PLN 8 billion."