Poland aims to raise tax collection by up to 10 billion zlotys ($2.6 billion) next year, partly by barring companies from using tax heavens abroad, to boost social spending, its deputy prime minister for economic issues told Reuters. The ruling Law and Justice party (PiS) swept into power in October, largely on a promise to raise welfare benefits for the poorest and to finance child benefits, at the expense of large corporations.
Although many of its campaign promises are due to kick in 2017 at the earliest, with the exception of child benefits, it will need to find billions in extra funding. It is not clear how PiS, which mixes a nationalist-minded agenda with leftist economics, wants to improve tax collection. But Deputy prime minister Mateusz Morawiecki told Reuters: "Plugging the tax system could bring 7-10 billion in 2016. This amount may grow later.
"The finance ministry is working on a detailed plan regarding this (tax) issue," Morawiecki said in an interview. Economists have warned that the government's plans risk driving up the fiscal deficit again, months after Poland came out of the European Union's penalty procedure this year. EU rules aim to limit deficits and debt as a proportion of gross domestic product (GDP).
Morawiecki, a 47-year-old former bank chief executive, said the government would narrow the budget gap in coming years. "As we will be closing tax gaps and economic growth will be rising over time, we will try to reduce the deficit in relation to GDP," he said, without giving details. Morawiecki quit as head of Poland's third-largest bank by assets, BZ WBK, owned by Spain's Santander, to join the PiS government earlier this year.
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