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Anti-inflationary shield 2.0. VAT reduction on food and fuel. The Sejm rejected Senate amendments

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The Sejm rejected the Senate’s amendments to the act, which is to temporarily reduce VAT on food, fertilizers and gas, among others. It is part of the so-called 2.0 anti-inflationary shield. The act will now be signed by the president.

On Wednesday, the Sejm voted on seven Senate amendments to the bill temporarily lowering VAT: to zero on food, fertilizers and gas; up to 5 percent hot and up to 8 percent. on fuel. The reduced rates of tax on goods and services are to apply from February 1 to July 31, 2022.

During the vote, MEPs rejected all amendments by an absolute majority of votes. The Act, which is an element of the so-called of the anti-inflationary shield 2.0 and is to enter into force on February 1 this year, it will now be signed by the president.

It is about the act amending the act on tax on goods and services, which was passed by the Sejm on January 13 this year.

VAT reduction on food and fuel – Senate amendments

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Last week, the Senate proposed seven amendments to the law, extending the catalog of goods from the drop to 8 percent. VAT on coal and coke, gas oils used for heating purposes, heating oils, other heating fuels and LPG gas used for heating purposes. The Senate also wanted to delete the obligation for sellers of goods with a reduced VAT Act to post clear information at the checkout that the reduced VAT rate applies from February 1, 2022 to July 31, 2022.

At the Tuesday meeting of the Parliamentary Public Finance Committee, opposition MPs pointed out, inter alia, that the provisions in the version adopted by the Sejm discriminate against people who do not have connections to the gas network. Kamil Rybikowski from the Office of the SME Ombudsman called for support for the amendment deleting the information order imposed on entrepreneurs, arguing that it violates the principle of proportionality and adequacy contained in the provisions of the Entrepreneurs’ Law. Ultimately, the committee assessed negatively all Senate amendments.


Anti-inflationary shield 2.0 – reduction of VAT on food and fuels

According to the act, VAT on food and beverages currently subject to the 5% rate is to drop to zero. With 23 percent up to 8 percent the rate of this tax is to drop on motor fuels: diesel oil, biocomponents constituting intrinsic fuels, gasoline, LPG gas. For fertilizers, plant protection products, garden soil and other means supporting agricultural production, VAT is to drop from 8%. to zero. VAT on gas is to drop from 8 percent. to zero, for thermal energy from 8 percent. to 5%, and in the case of electricity, the reduced tax rate of 5% will be maintained.

The total decrease in state budget revenues was estimated at approx. PLN 11.6 billion, of which the reduction of VAT on food and beverages is to translate into a decrease by approx. PLN 2.92 billion, in the case of fuels it is to amount to approx. PLN 3.11 billion , the decrease in VAT on fertilizers has a negative effect on the budget at the level of PLN 0.52 billion, for gas – about PLN 2.09 billion, for electricity – about PLN 2.30 billion, and for heat – about PLN 0, PLN 67 billion

Inflation in Poland

The data of the Central Statistical Office show that inflation in December 2021 was 8.6 percent Every year. The reading is in line with the previously published so-called quick estimate. A month earlier, in November, prices were rising by 7.8%. Every year.

Inflation at the level of 8.6%. this is the highest reading in 21 years. In December 2000, inflation was 8.5 percent. Every year.

According to data from the Central Statistical Office of Poland (GUS), the December inflation was boosted by higher prices for the use of a flat (10%), food (8.7%) and transport (22.7%).

The average annual price index of consumer goods and services in total in 2021 was 5.1%. – also reported by the Central Statistical Office. In 2020, the average annual inflation was 3.4%.

Inflation in Poland – December 2021PAP

Main photo source: PhotoRK / Shutterstock

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