Lewiatan: Reducing VAT to zero percent on food is a serious problem for entrepreneurs

2022-01-11 17:28

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2022-01-11 17:28

Lewiatan: Reducing VAT to zero percent on food is a serious problem for entrepreneurs
Lewiatan: Reducing VAT to zero percent on food is a serious problem for entrepreneurs
photo: Syda Productions / / Shutterstock

Reducing VAT to zero percent for food is a serious problem for entrepreneurs – wrote the expert of the Polish Confederation Lewiatan, Mariusz Zielonka, in Tuesday’s comment. He is also concerned that when the anti-inflation shield announced by Prime Minister Mateusz Morawiecki stops working, the price increase may exceed 10 percent.

On Tuesday, the government adopted the assumptions of the so-called the anti-inflationary shield 2.0, which assumes, inter alia, reducing VAT on fuels and autogas and introducing zero VAT on food. After the meeting of the Council of Ministers, Prime Minister Mateusz Morawiecki announced the introduction of these instruments from February 1 for 6 months at a press conference.

According to the Lewiatan expert, the biggest unknown of the new shield will be the moment it ends its operation. “Then inflation may exceed 10 percent, unless there is a reversal of trends in world markets,” he wrote. He explained that it was about rising prices of fuels, fertilizers, food products, as well as a sudden change in the policies of other countries that stimulate demand on the international market.

“The announced VAT cuts will bring temporary relief to consumers, but the question of how much the prices will fall remains open,” we read. He pointed out that the reduction in food prices means savings of around PLN 40-50 on basic products per month for the household, but taking into account the dynamics of price growth, for example from the last flash estimate of inflation (2.1% per month), in February we can expect that basic products will cost as much as in mid-November 2021.

He calculated that the reduction in VAT may decrease the fuel price by approximately PLN 0.40 per liter. “In the case of prices at gas stations, the price of oil in the world markets will be more important than the government’s intervention, and this again exceeded $ 80 a barrel and is approaching the highs of 2021. This time, the rulers will not be as lucky as in the case of a cut excise tax on fuels, when the fall in prices was noticeable even before the first shield was launched, “we read. Thus – as he emphasized – “we cannot count on the announced 70-80 grosz per liter”.

He stressed that the reduction of VAT on food products to 0 percent. It is also a serious problem for entrepreneurs who have to change sales systems, reprogram cash registers within two weeks, and probably reverse this process in six months’ time.

“It is also incomprehensible that once again the government is omitting entrepreneurs in its actions. It is enough to mention that producer inflation reached 13.2 percent in November, and the current fuel prices will cause further increases in this indicator,” we read. (PAP)

author: Ewa Wesołowska

ewes / skr /

Source:PAP

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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