Poland adopts budget plan for 2015
June 11, 2014
The Polish government will build its 2015 budget on 3.8% GDP growth and 2.3% inflation and will retain its heightened VAT rates and continue the freeze on PIT income thresholds and standard deductions, according to the budget plan adopted by the government on Tuesday.
The government will also raise the minimum wage to PLN 1,750 monthly and begin mulling conditions for an eventual un-freezing of wages in public administration, Prime Minister Donald Tusk told a press briefing.
The move to a PLN 1,750 minimum wage, as previously leaked to the press, is above the level otherwise required by Polish statute. Tusk called the move "a modest first step, but a good sign for starters," possible now that Poland "has broken the threat of the crisis."
An unfreezing of the public administration wage bill won't come in 2015, in part with an eye to the requirements of the excessive deficit procedure, but Tusk claims to have ordered an analysis that could open the door for an eventual move.
"We don't rule out that in the nearest future, after analysis, we will be able to make a decision about a change."
Poland will gain PLN 1.32 billion in 2015 on the PIT freeze and would gain another PLN 2.9 billion in 2016 if it continues, according to a study by the CenEA think tank.
Tax receipts should be 4 to 5% higher than in 2014. An additional PLN 2 billion should come from "tightening" the system. Investment spending could increase as the election year coincides with a better moment in the EU funding cycle.