The treasury has announced plans to make tax returns easier for smallbusiness at the same time as making things a little easier for the low paid.
Unfortunately the bitter truth is that it is large companies in this country which are likely to fill the budget deficit. Finance minister Marek Belka however says that they will manage anyway.
Helping those earning less makes a good deal of sense. The finance minister is well aware of the strength of the black economy and is seeking ways to bring people back into the legal arena as far as direct taxation is concerned. The tax threshold will now commence at PLN760 per month, nothing compared to Western standards but quite a revolution in this country.
The proposals for tax reform being made by the government would put more money in the pockets of almost eight million people whereas some eleven million would not note any difference and 1.7m would be out of pocket.
Belka claims that the latter will be the largest earners and therefore do not need the cash so much and that this system would be more just. As far as business is concerned there will not be much in the way of tax reductions but the whole system and red tape associated with it will be reduced which should be a major saving for most businesses. Belka admits that a large part of the 'Above all Business' plan now being toted by the current government was an idea of his predecessor Leszek Balcerowicz. Belka notes that there is at present a drop in demand although retail sales are improving. He says that for him the most important issue is that of investment spending which is now well down on what it once was. He accepts that no-one is going to invest in production if the products manufactured cannot be sold and hopes that the impulse that he gives the economy may be able to translate into increased investments.