WARSAW, Poland ( Associated Press) – Polish Prime Minister Mateusz Morawiecki on Tuesday announced a second round of sales tax cuts as part of the right-wing government’s efforts to fight inflation. After reaching a 21-year high last month.
Moraviki blames rising consumer prices on high energy costs, saying they are a result of Russian gas prices and EU policy on greenhouse gas emissions. However, the head of the International Energy Agency has said the boom in demand for fossil fuels plays a big role, and opposition leaders have accused the ruling party of sticking to coal for too long.
The demand for goods has picked up since the depth of the coronavirus pandemic, the prime minister said It also contributed to the rise in inflation.
From February to July, the tax on engine fuel will be reduced from 23% to 8%, the government said. There will be no tax on gas used for cooking and heating or on synthetic fertilizers made from gas. On some foods, this will drop from 5% to zero.
Morawiecki appealed to food vendors to reduce their prices accordingly and said people should see positive changes in the coming weeks. He said the move was expected to cost the government up to 20 billion zloty ($5 billion), but would result in a reduction in inflation by about 1.5 percent.
The announcement comes at a time when the government is facing severe criticism from individuals and professional groups over the complex personal income tax system introduced on January 1.
Morawiecki has said that most Poles would benefit from the “Polish Order” system, especially those with modest earnings, but January’s payments to police and pensioners have been significantly lower than December’s, causing public outcry.
The government has accused employers’ accountants of wrong calculations and promised equal pay in the coming weeks.
Other anti-inflation tax cuts and aid for the hardest-hit families were announced in November and took effect on December 20, costing the government about 10 billion zloty ($2.5 billion).
The state statistical office said consumer prices rose 8.6% in December from a year earlier, the highest rate since November 2000.