What VAT reductions in the – MP and not government – draft?

The parliamentary – not the governmental – bill amending the act on tax on goods and services, which was already being processed in the Sejm and presented yesterday, does not include an assessment of the effects of the regulation.



The Sejm is already dealing with the draft of lowering VAT rates, which was sent to the Sejm yesterday.

What exactly does the project contain? Proposes to lower VAT rates in the period from February 1, 2022 to July 31, 2022 (in brackets the effect of lowering state budget revenues):

• for food that is currently subject to the 5% VAT rate – up to the 0% rate (PLN 2.92 billion);

• for motor fuels, ie diesel oil, biocomponents constituting self-contained fuels, motor gasoline, liquefied LPG – from the 23% rate to the 8% rate (PLN 3.11 billion);

• for fertilizers, plant protection products, horticultural soil and other agricultural production support measures (such as: soil conditioners, growth stimulants and some growing media) – from the 8% rate to the 0% rate (approximately PLN 0.52 billion; estimated under 2020 conditions);

• for natural gas – up to the rate of 0% (PLN 2.09 billion);

• for electricity and heat – up to the rate of 5% (PLN 2.30 billion and PLN 0.67 billion).

The total effects for the state budget are a loss of PLN 11.60 billion.

Unfortunately – this is all that was mentioned in the explanatory memorandum about the costs and financial effects of the project. We will not read anything here about who and how much will benefit from the changes.

It only stated: “The acceleration in the growth of energy prices, and thus also of food prices, affects the poorest part of society the most, ie retirees, pensioners, the least earning and the unemployed. The rise in food prices is associated with significant economic and social costs for society as a whole, but the most noticeable costs for the poorest people, who spend the most on food in relation to their monthly income ”. It has not been calculated how much will fall (or increase) food prices and who will benefit from it and how much.

While discussing the reduction to 0% VAT for goods used in agricultural production, which are currently subject to the 8% rate, it was stated: what the prices of food products (fertilizers, plant protection products and other agricultural products) may have on food prices, it is justified to lower the VAT rate for this type of goods to 0% “- again no specific calculations were made of the expected effects of the reduction in the VAT rate for farmers.

Similarly with the effects of the cut VAT on fuel and energy.

In addition, the draft includes an obligation to post at the cash register at the premises of the enterprise where the sale of food products, motor fuels and goods used for agricultural production is carried out, clear information on the reduction of VAT rates, respectively, on goods for which the proposed act is introduced into the Act o VAT – a reduction in VAT rates. Have the project promoters decided that this guarantees effects in the form of price reductions for customers?

The regulatory impact assessment – an element necessary in government bills – was not attached to the draft. As a parliamentary draft, it could have had this deficiency.

The project is attached.



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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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