The looming new EU directive on VAT rates presents the Polish government with important decisions regarding tax breaks, as reported by Money.pl. Starting January 2025, Poland must adjust its VAT rates to comply with the new regulations. However, the government’s lack of action raises concerns among experts and the public.
Currently, the Polish Ministry of Finance has taken no steps to develop a draft of VAT law changes that would define new groups of goods and services eligible for reduced tax rates. According to the EU directive, such changes should be ready by the end of 2024. However, due to government inactivity, much remains unclear about future tax breaks.
According to experts, the new VAT rates could significantly impact the wallets of Poles. Some goods currently benefiting from preferential rates may lose tax benefits, leading to price hikes. While decisions in this matter lie with the government, failure to act could have negative consequences for the economy and budget.
It’s also worth noting the growing VAT gap, which surged in 2023 to 15.8%, according to the Ministry of Finance. This implies that actual tax revenues may be much lower than expected, further worsening the budgetary situation.
In light of these challenges, economists warn of rising debt servicing costs that could burden the state budget significantly. Poland already has one of the highest debt servicing costs in the EU, posing serious problems in the coming years.
Planned actions aimed at reducing the VAT gap and developing tax infrastructure may help mitigate negative effects, but the extent of their success remains uncertain.
The government’s inaction regarding changes in VAT rates and rising debt servicing costs puts Poland in a difficult financial situation, which could have serious consequences for the economy and budget in the coming years.
