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Friday, June 14, 2024

State budget for 2023 – there will be changes. Project in the Sejm

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The draft amendment to the Budget Act for 2023 has been submitted to the Sejm. “The outlook for 2023 in terms of the macroeconomic situation has deteriorated for both Poland and Europe,” the justification reads. In the draft amendment, the projected revenues from VAT and excise duty were lowered, while PIT and CIT revenues were increased. At the same time, the government assumes the maintenance of the so-called anti-inflation shield in terms of reduced VAT rates on food.

Last week, the Council of Ministers adopted a draft amendment to the budget act for 2023, when some Poles rested over the long weekend along with a draft resolution of the Council of Ministers on the draft amendment to the Budget Act for 2023 – documents submitted by the Minister of Finance.

Higher deficit

As it was written in the introduction to the justification of the draft amendment to the Budget Act for 2023, it is envisaged that the state budget deficit will amount to PLN 92 billion compared to PLN 68 billion currently planned in the act (an increase in the state budget deficit by PLN 24 billion). The state budget revenues in the amendment will amount to PLN 601.4 billion (compared to PLN 604.543 billion provided for in the Budget Act for this year), and expenditures PLN 693.4 billion (compared to PLN 672.543 billion from the Budget Act for this year).

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Throughout the current year, it is forecast in the novella VAT revenue at the level of PLN 272.9 billion, i.e. PLN 13.4 billion (4.7%) less than assumed in the budget act for 2023.

“It is expected that excise tax revenue in 2023 will amount to PLN 83.8 billion, i.e. PLN 4.797 billion (5.4%) less than in the 2023 Budget Act. revenue from excise duty on motor fuels, tobacco products and ethyl alcohol.

Added this year income from CIT will amount to PLN 77.6 billion, which is PLN 4 billion (5.4%) higher than in the Budget Act for 2023. On the other hand income from PIT will be made in the amount of PLN 83.57 billion, i.e. compared to the budget act for this year. will be higher by PLN 5 billion (6.6%).

Total tax revenues – in accordance with the amendment – in 2023 will amount to PLN 536.8 billion, which is PLN 8.5 billion less than specified in the act for this year.

Mateusz MorawieckiPiotr Nowak/PAP

GDP projections

As it was written in the introduction to the justification of the draft amendment to the budget act, “the macroeconomic outlook for 2023 has deteriorated as a result of the ongoing war in Ukraine, rising energy prices fueling inflation and the effects of monetary policy tightening, both for Poland and Europe.”

“Currently, a lower real GDP growth rate than assumed in the budget act for the current year is forecast, as well as a lower real growth in private consumption is expected. Real GDP is expected to increase this year by 0.9 percent, after increasing by 5.1 percent recorded last year, compared to an increase of 1.7 percent after an increase of 4.6 percent assumed in last year’s justification to the budget act for 2023,” we read.

As stated, slightly higher than originally forecast will be in the budget inflation (12 against 9.8 percent).

Nevertheless, the update of the macroeconomic scenario does not have a clear negative impact on the forecast of budget revenues.

State budget for 2023PAP/Maciej Zielinski

Reduced VAT rates on food

It was emphasized that the parallel change in the forecast of state budget revenues for 2023 results from the update of macroeconomic forecasts, but also the update of assumptions regarding the existing system changes, including the maintenance of the so-called anti-inflation shield “in terms of reduced VAT rates on food (i.e. maintaining a solution that was not originally included in the VAT revenue forecast for 2023), as well as taking into account the latest information on the current implementation of revenues.

As indicated, on the expenditure side of the state budget, i.a. the amount to supplement the general subsidy for the implementation of tasks of local government units was increased.

“It was also decided to transfer additional funds with the possibility of their use for employees of the state budget sphere for one-off payment of salaries in 2023 (additional funds will also be directed to teachers) and to unfreeze the basis for calculating the company’s social benefit fund and social funds from July 1, 2023 ( by another 2 years) compared to the amount planned for 2023.

The draft amendment stipulates that the Act enters into force on the day following its promulgation.

Main photo source: Piotr Nowak/PAP



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