Poland announces new 'supermarket tax'

[WARSAW] The Polish finance ministry on Monday announced plans for a new turnover tax that will mainly affect international supermarket chains operating in the eastern European economic giant.

Dubbed a "supermarket tax," it will see enterprises earning annual profits higher than 300 million zloty (S$105 million) taxed at 1.3 per cent of their earnings, the ministry said in a statement.

Companies earning less will have to contribute 0.7 per cent.

The tax will mostly affect foreign supermarket chains operating in Poland such as Britain's Tesco, France's Carrefour and Auchan or Germany's Kaufland and Metro.

Small businesses earning less than 1.5 million zloty will not be affected by the new tax at all.

Retail sales made on Saturdays, Sundays and other holidays will meanwhile be taxed at 1.9 per cent.

The eurosceptic Law and Justice (PiS) party had pledged it would introduce the tax, which has now been submitted to the prime minister's office for review, during the electoral campaign that swept it to power in October last year.

The finance ministry hopes to net some two billion zloty through the levy in 2016.

The government has said the money will be used to fund welfare programmes such as a 500 zloty allocation per child to each family, starting from the second child.

The ministry claims the new levy will not push prices up for consumers.

The government in December pushed through another levy, which is due to take effect from February 1, and will see a 0.44-per cent annual tax on the assets of banks and insurance companies.

Critics say it will drive up bank charges and the cost of credit and insurance bills, while the gloomiest forecasters predict it could even wreck Poland's financial system.

AFP