Mateusz Morawiecki made the declaration at a news conference on Monday, Polish state news agency PAP reported.
Visiting a bakery and pastry firm in the central village of Kuligów, the prime minister was asked if the government’s package of anti-inflation measures would be extended to 2023.
Morawiecki replied that “the anti-inflation shield will remain in place, but in a different form,” due to objections raised by the European Union’s executive Commission.
He told reporters: “The European Commission has threatened to impose fines if we don’t abolish the current measures, such as reductions in VAT.”
Morawiecki added: “We plan to replace them with a different anti-inflation policy, to make sure that the prices for households, small and mid-sized firms, hospitals and schools remain frozen.”
Zero VAT rate on food to remain ‘as long as possible’
Morawiecki said that energy companies would shape prices accordingly, to offset the return of VAT rates to previous levels, the PAP news agency reported.
The Polish prime minister added: “For as long as possible, as long as there are no firm objections from the European Commission, we’ll keep the zero VAT rate on food. It is a much smaller disruption to the single market, and above all it translates to slightly lower prices for Polish families.”
“We’ll be pushing for at least those VAT reductions to remain, while other measures will be replaced with a different mechanism,” Morawiecki said, adding that “Poland doesn’t want another conflict with the European Commission.”
Response to ‘Putin’s energy war on Europe’
Morawiecki said that Russia, “through its price policy, through its energy policy, has caused a dramatic surge in energy prices across Europe.”
He added the soaring energy prices “have also affected Polish entrepreneurs, as well as increasing the costs faced by all the institutions and households.”
Morawiecki declared: “Our measures in response to Putin and Russia’s energy war are designed to alleviate these enormous costs.”
He added the government was seeking to protect people against rising prices “in various ways.”
“The war has been emptying the wallets of people across Europe and we are seeking to counter this,” Morawiecki told reporters.
Inflation to start falling in the first half of 2023?
He also said that “hopefully inflation will begin a downward trend by the end of the first quarter of 2023, maybe in the second quarter of 2023,” although “it will hit us hard during the winter months, when the prices of energy commodities are so steep.”
The Polish government’s “anti-inflation shield” includes scrapping value-added tax (VAT) on food, cutting the tax on fuel to 8 percent, and reducing the VAT on gas and heat, among other measures, according to officials.
Tuesday is day 257 of the Russian invasion of Ukraine.
Source: PAP, gazetaprawna.pl