FinMin Szalamacha on PLN500 child allowance, banking tax, SK bank et al

Following are quotes from Finance Minister Pawel Szalamacha’s interview for radio Wnet.

CORPORATE INCOME TAX – “There is no chance for introducing the CIT tax reduction [to 15% for small firms] next year.”

NEW TAXES – Revenues: in the case of the banking tax “we are talking about PLN6.0-6.5bn at the rate we announced, i.e. 0.39% of total assets. This is based on data from [financial market regulator] KNF. In the case of supermarkets, this will also be a figure we announced earlier: PLN2.5-3 bn.” Timing: Appropriate bills will likely be submitted to parliament by the governing party PiS MPs rather than the government, in order to speed things up. “With the government legislative path, drafts would appear in January or February, which would be too late.” and “I have no problem with the tax taking effect as of February 1 or March 1, 2016.” Reception: Szalamacha believes that the cost of the banking tax will not be passed on to clients. If it is, state-controlled banks such as PKO BP, BOS, Bank Pocztowy could use their competitive advantage on the market.

PLN500 child support – Eligibility: “It seems that in families where income per person is above PLN4-5k the stimulus in the form of an additional allowance does not play a major role. Perhaps one should consider whether there should be a cap above which this allowance would not be paid out.” Cost: The PLN20bn annual price tag for the program “is slightly overestimated.” Financing: Szalamacha reiterated the sources of financing of the program: increasing dividends from state-owned companies, increasing the budget deficit by as much as possible without breaching the 3% of GDP deficit cap, i.e. PLN1-1.5bn, and improved VAT collection.

OTHER POLICY PROPOSALS – The PLN500 child support program is a priority and “other goals need to subordinate.”

SK BANK BANKRUPTCY – Poland should consider whether the financial market regulator KNF took adequate actions with regard to the bankruptcy of SK Bank: “The question is whether decisions regarding SK Bank in recent months were proper. I have a basic questions on whether the bank regulator KNF reacted in due time to the situation at the bank in the recent months.” Szalamacha pointed to PLN500m of state funds the bank received in August (a decision sanctioned by NBP head Marek Belka, KNF head Andrzej Jakubiak and Finance Minister Mateusz Szczurek), suggesting that the bank may have been kept afloat for the election campaign and only allowed to go bankrupt under the new government.

krba/ ami

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