Poland on track for PLN 13 bln shortfall in VAT in FY2015

Poland is headed towards a “very strong state budget shortfall” in 2015 with hopes to cover a PLN 13 bln shortfall in VAT based only a legally fraught LTE frequency tender, cabinet minister Henryk Kowalczyk told a radio broadcaster of what he called the “deplorable” state of finances at the new government’s launch.

The PLN 13 bln likely VAT shortfall stems in part from VAT fraud, Kowalczyk claimed for Radio Zet. “It’s a significant budget gap for the end of 2015, a gap left by the PO-PSL government.” Kowalczyk called the outgoing government’s initial VAT target” very modest to begin with.”

Below-plan VAT receipts this year are a result of lower collection in H1, which Poland has been unable to make up for in H2, deputy Finance Minister Hanna Majszczyk told reporters commenting on Kowalczyk’s words. October receipts were “decent,” but it is too early to assess November collection, she added.

The final size of the 2015 budget gap will depend on whether or not Poland collects still this year over PLN 9 bln in receipts from the concluded but still unsettled and disputed auction of LTE frequencies, Kowalczyk said on the radio.

At end-October, Poland had collected PLN 155.3 bln in indirect tax revenues (including PLN 51.8 bln in excise) versus the full-year plan for nearly PLN 199.5 bln (including PLN 63.6 bln in excise).

krba/ gty/ maf/ nik/ ami

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