Monday , June 14 2021

Finance Minister: Soon solutions for Poles' finances – business

Today, January 25 (16:04)
Update: today, January 25 (17:16)

Valuation of the earnings criterion for the benefit of 500+ is warranted, and the Treasury is analyzing the changes in the free amount, the thresholds and the reduction of the tax wedge – says Theresa Chervinska, finance minister in an interview with Interia.

Teresa Czerwińska, Minister of Finance. Fig. Andrzej Hulimka / FORUM

– The planned fiscal stimulus should contribute to raising professional activity – emphasizes Czerwińska. He adds that a one-off supplement to pensioners is not planned, the budget deficit for 2018 will be closer to 10 out of 11 billion zlotys, and in 2019 we will face an economically soft landing. The finance minister "believes" that PLN 9 billion due to compensation for higher energy prices is the maximum amount. He also says that the VAT rate for juices and nectars will ultimately reach 5%, for beverages – 23%.

Paul Tzurillo, Intera: We are meeting at a time when we summarize the results of the budget in 2018 and at the same time end the work of the parliament in the budget for 2019. But first I have to ask you about another topical topic. "Gazzetta Prana" writes that Deputy Minister Petar Novak was dismissed by the Financial Supervision Commission when he suggested supervisor to deal with the eventual introduction of the SKOK Stefczyka syndicate. How do you comment on this question?

Theresa Chervinska, Finance Minister: – I would not associate this with the resignation of Minister Novak, a representative of the Treasury in the Financial Supervision Commission, because he resigned on his own request. He had asked him before. Minister Nowak received new duties, a new department, additional tasks, for example in the case of Critical Applications, and submitted a request for resignation from the Financial Supervisory Authority. At that time, Pavel Gruza became a ministry representative at the KNF, so there was a change, but was the result of a change in the sphere of competence within the ministry. I would not connect these two things completely.

The second question. At the end of last year, the government decided to counteract the increase in bills that Poles receive for electricity. There is no regulation yet, but there were different estimates of what the cost of these compensations would be. The Department of Energy is talking about nine billion, but according to analysts, it may even be several billion. How much will it cost and when will the appropriate regulation be the Minister of Energy?

– Let's look at the facts. First of all, the Minister of Energy does not report to the Minister of Finance, but to the Prime Minister, and I am convinced that this regulation will come soon. On the other hand, with regard to costs, these compensations were foreseen for PLN 9 billion, this amount being defined as the maximum in the effects of the regulation. We have to take into account the prices of the certificates in this situation because if they want to cover these compensations, their price is marketable and I do not know how they will be shaped. On the other hand, the scale of compensation is unknown, so today I can not foresee what the final size will be. I believe that the nine billion dollars Mr. Tchorevski founded is really the maximum amount.

A few days ago, the prime minister also revealed that the budget deficit for the previous year will be PLN 10-11 billion, much lower than the budget law (PLN 41.5 billion) and lower than the latest ministry estimates (PLN 15 billion). Are these 10-11 billion PLNs the final result?

– First, I want to clearly distinguish two categories, which are often confused. This is the budget deficit and the deficit of the public finance sector. The budget is part of the financial sector, and in fact, the deficit will amount to PLN 10-11 billion, probably closer to the lower limit. However, when it comes to the public finance deficit, the larger aggregate, its results will be known much later. It consists of local government finances and this data is reduced. We will have them in mid-February, and then a summary will be provided. However, I can say that the deficit in the public finance sector will also be much lower than planned. I spoke about 0.5% ago. And I support this assessment. A good period of prosperity and rapid GDP growth is good for fiscal consolidation.

How can GDP growth appear in the fourth quarter and throughout 2018?

– When it comes to forecasts, we are talking about estimates close to 5%. Estimates suggested that this would be 4.9-5%, but I'm currently looking optimistically on input data and I think 5%. must be achieved.

– A slowdown in economic growth is expected in 2019. The budget adopts a GDP growth of just under 4%, ie. 3.8%.

Is this a reliable forecast of what's happening in the world?

– We made these assumptions half a year ago when we presented the draft budget and then accepted 3.8%. on the basis of current data. At that time, they were judged to be very conservative and today we see that they are close to the market consensus, which suggests an increase of about 3.7 per cent. We see risks in the economic environment, such as a weakening of the German economy or british risks, but the delay in the case of Poland will be quite a soft landing. That is, I estimate my forecasts as real as well as inflation forecasts.

You recently talked about the possibility of so-called fiscal stimulus in 2019. How can it look like in practice?

– In fact, the whole art is not about breaking down GDP records in the short term, but maintaining relatively high growth in the long run. When we have a good global situation it seems that it is not very problematic but it is much more difficult during the delay and we have to take these trends.

"Today we have interest rates at a record low to think about some fiscal policy instruments. This stimulation must go in the direction of economic activity and the labor market, because if we take into account the exhaustion of the work-pool, then we need tools that will stimulate professional activity and productivity, which means increasing innovation, qualification and restructuring when it comes to the labor market. We need to increase productivity with these demographic trends.

We have a year of elections. Analysts suggest there may be proposals to increase the tax-free amount, raise the income limit in the 500+ program. Does the government take these actions into account?

– As regards the validation of the income criterion for 500+ compensation as a result of wage increases, the validation of the criterion appears to be justified because otherwise more and more people would leave the service.

– By contrast, I think more about stimulating professional activity, it is worth considering the components of labor costs. You mentioned the free amount, but we can also analyze the tax wedge and its components, think about how to reduce labor costs, promote work and get out of the shadow economy.

Does this mean that it is possible to reduce social security contributions?

"Today, I do not want to manipulate proposals that are not yet sufficiently analyzed and appreciated. It should be remembered that with decision-making today we will feel the effects of many years. That is why I believe that it is not possible to reduce the ZUS premium as unrealistic.

Are such services as the one-time 500+ for pensioners possible?

– I read the press, watched the media and watched a festival of ideas, but we are not planning such activities at the moment. Rather, we should direct them to the labor market.

Do you work on changes in VAT rates, think about the VAT matrix, some changes are possible here, and 2019 may be the year of the VAT matrix?

– It could be called a year of the VAT matrix, although I would have preferred this year to be the e-PIT year because it is a fundamental change. As for the matrix, we are talking about it today because we want to apply it in advance, and prices will enter in 2020. Part – about e-books, e-press plans are scheduled for this year, but we want to give time to prepare for these changes. We are talking about simplification, we are not deaf to arguments. An example of a talk about juices and drinks – we talked to producers, we suggested in a compromise that we can treat juices and nectars at the lowest 5%, and beverages, that's the rest – 23%. Binding speed information is also important – it is the end of uncertainty about which rate is binding. We will give entrepreneurs one year to prepare for the move to a simpler VAT system. This will also mean fewer manipulation options.

You mentioned e-PIT. February 15 is an important date for taxpayers – the electronic tax has to wait for the taxpayer. Offices can do so?

– We are changing the way the tax administration thinks, because it will now issue DMLs – for example, someone who reports FIFO 37 when working full-time or PDF 38 – can use ePIT. He can settle his bills with his wife, he can even forget about PIT because he will automatically be sent.

What proposals can the government have for the so-called middle class? Is it possible, for example, to change the tax thresholds?

"We are doing analyzes and summaries today. We want to present the Prime Minister with some suggestions to formulate some conclusions, and the Prime Minister will certainly come up with such suggestions.

How many billion zlotys do you have for fiscal stimulus this year?

– The budget is on the table, usually the natural flexibility of the budget occurs during the year, though only because the costs are planned as maximum categories and the income is minimal. Revenue during the budget year may be higher. Some flexibility is included in the budget.

He was interviewed by Pavel Cheryllo

The conversation took place on 24 January


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