Friday

3rd Apr 2020

Commission targets Poland's supermarket tax

  • Smaller Polish retailers support the tax, as it hits big businesses much harder. (Photo: msz.pl)

The European Commission has announced an in-depth investigation into a Polish tax on the retail sector, in a move that could complicate Poland’s government's domestic plans.

The EU executive is concerned that the system, which was introduced on 1 September, amounts to state aid to small retailers because it taxes big businesses more heavily.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

Poland was told to suspend the levy until the commission has concluded its probe, launched on Monday (19 September).

European Parliament vice president Ryszard Czarnecki, from Poland’s ruling Law and Justice (PiS) party, denounced the probe as ”wholly political”, and said the commission was acting in the interests of Western supermarkets in Poland.

The European Commission dismissed such claims.

"The Commission has looked at the issue of progressive retail taxes before, in fact we already took a decision on a Hungarian case in July," said commission spokesman Ricardo Cardoso.

The Hungarian authorities eventually backed down and binned their tax plans.

How to finance baby subsidy

The infringement procedure makes the government’s life more difficult.

PiS is riding high in opinion polls, partly because they have promised to give generous benefits to any family with more than one child - 500 zloty (€116) for the second and every subsequent child every month.

The programme is so popular with parents that even the market liberal Modern party recently said it would support it for poorer parents. The only problem is how to finance it.

Poland’s finance minister Pawel Szalamacha last year set out to finance the programme through the retail tax, which was supposed to raise €348 million a year.

Other initiatives to help fund the scheme included a banking tax, which is still under EU scrutiny, and better collection of VAT - a recent commission report showed Poland failed to collect some 24 percent of VAT due in 2014.

Government spokesman Waldemar Grzegorczyk said Warsaw had prepared for weeks for the commission’s decision.

He said the government would present a new solution on the retail tax on Tuesday.

Warsaw may apply a flat tax, as Hungary did, but it would fall to a larger extent on domestic business and be less popular than the progressive one.

Poland may remove constitutional judges

Amid a long-lasting dispute over the functioning of Poland's constitutional court, a senior Law and Justice MP suggests removing judges who obstruct parliament.

Interview

Polish government in bid to defund NGOs

Ruling Law and Justice has promised to overhaul the NGO sector. The move could strain relations with Norway, a major donor to Polish civic life.

No breakthrough at EU budget summit

EU leaders failed to reach agreement on the EU's long-term budget, as richer states and poorer 'cohesion countries' locked horns. The impasse continues over how to fund the Brexit gap.

Vietnam sent champagne to MEPs ahead of trade vote

A trade deal with Vietnam sailed through the European Parliament's international trade committee and after its embassy sent MEPs bottles of Moet & Chandon Imperial champagne over Christmas.

Feature

Promises and doubts: Africa's free-trade adventure

The EU is hoping that a continent-wide free trade agreement in Africa will help lift millions out of poverty and help solve issues of security and migration. But its message of values and equal partnership do not resonate with everyone.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. Court: Three countries broke EU law on migrant relocation
  2. Journalism hit hard by corona crisis
  3. EU fighting shortages and faulty medical supplies
  4. New EU navy operation to keep migrant details secret
  5. MEP: Constituents are our window into this tragedy
  6. Without European patriotism, EU decline is inevitable
  7. EU cancels April Fool's 'fake news'
  8. A coronavirus 'Marshall Plan' alone won't be nearly enough

Join EUobserver

Support quality EU news

Join us