The still - reigning pandemic Covid-19 It is increasingly affecting different aspects of our lives. Year 2020 He surprised the whole world with the temporary closure of the economy, increased demand for food and medical supplies, disruptions in the supply chain and a virus for which there is no cure.
Year 2021 In Poland, we can find ourselves among the more difficult ones, despite dealing with the virus pandemic by creating vaccination, but we have encountered problems of rapid price increases. In December 2021 Inflation reached 8.6% according to CSO data on year-on-year basis.
The annual inflation rate in December was the highest recorded so far in the 21st century – the previous higher reading is November 2000 (9.3%).
Government action is aimed at mitigating the effects of such violent inflation. At the beginning of the year we were presented a project – the Anti-Inflation Shield 2.0. first The version of the project was introduced last December. Her anti-inflation solutions included:
- Introduction of the household protective allowance;
- The abolition of excise duty on electricity;
- Reduction of VAT on electricity from 23% to 5%;
- Reduction of VAT on natural gas from 23% to 8%;
Lowering fuel prices by a maximum reduction in excise duty.
The aim of the programme is to protect citizens from constant inflation and reduce its cost to Polish families. The government strategy pursued by the project aims to temporarily abolish or reduce VAT. New solutions will apply from 1 February 2022 to 31 July 2022, Key provisions :
- Reduction of the VAT rate on fuel to 8%;
- Introduction of a zero VAT rate on food products;
- Introduction of a zero VAT rate on gas;
- Continued use 5% VAT rates on electricity;
- Reduction of VAT on heat to 5%;
Introduction of a zero VAT rate on fertilisers.
Unfortunately, according to experts, the anti-inflation shield is only able to flatten inflation rates temporarily. Scenario of further inflation growth in 2022 seems pretty real. In addition, ING analysts believe that government programs really only delay the inevitable increase in energy and fuel prices.
True, this will lead to a temporary fall in inflation one This effect will simultaneously prolong the period of its elevated level. Furthermore, returning to the starting rates of excise duty and VAT will be a difficult political decision as it will result in a steep increase in fuel and energy prices.
Written by Darya Bannaya
Younger tax consultant. Graduate of Law at the Faculty of Law and Administration of the University of Warsaw, graduate of Global Business, Finance and Management in Warsaw School of Economics. Winner of the Ministry of Finance competition “Tax to Leaders” 7. edition. Conducting trainings and conferences for foreigners in tax aspects of conducting and establishing business in Poland.
He specializes in tax law, advising clients on current matters relating primarily to income taxes.
Author and co-author of a tax law publication.