Government adopts new budget law

Ewa Kopacz: photo - PAP/Bartłomiej Zborowski

The document accepted by the government of Ewa Kopacz on Wednesday stipulates for a budget deficit in 2015 no higher than 46.80 billion zloty (11.2 billion euro), slightly lower than the gap planned for this year.

Budget revenues are expected to reach 297.25 billion zloty (71.18 billion euro) and expenditures should sum up to 343.33 billion zloty (82.22 billion euro).

The plan is based on the forecast that Poland's GDP will grow by 3.4 percent in 2015 and that the average inflation that year will be 1.2 percent.

The draft regulation introduces some modifications in the tax system. One of them is the 20 percent increase of the tax relief for parents of at least three children, which should allow families with lower incomes to be able to make use of it.

The government has also decided to modify fuel taxation rules, simplify VAT calculation for the purchase of passenger cars and raise pensions, while at the same time not increasing salaries in the government administration sector.

Grzegorz Maliszewski, chief economist at Bank Millennium, told Polish Radio that the planned budget deficit is still high. This may signal an easing of fiscal policy and may bring a positive outcome for the economy, he added.

At the same time, he stressed that the government will not have an easy year in terms of carrying out the budget plan. The Russia-Ukraine conflict and the trade war between Russia and the West are likely to have a growing impact on the Polish economy, he said.

The government is obliged to send the draft budget law to parliament before the end of September. Within the next four months, the regulation should be approved there. Upon receiving the budget law, the president is obliged to sign it within seven days. (kw)