Budget for 2016 on the way

2016 budget act was passed through the Sejm (lower chamber of Polish Parliament) on Saturday. The state’s presentation of the planned revenue and spending closes with a deficit in the amount of 54.7 billion PLN.

Polish MPs worked on over three hundred proposed amendments and eventually approved of the financial plan for 2016. The proposed budget act was largely drafted by the previous government, before the elections.

This year’s state revenue is planned to reach 313,788,526,000 PLN, of which 276,120,000,000 PLN are to be proceeds of state taxes. Another sources of income are dividend payments and payments from profits (including payments from profits of National Bank of Poland), customs duties and also spectrum auctions.

The government has recently introduced a new tax on banks, insurance companies, loan companies and Savings and Credit Unions. These financial institutions will have to give up 0.44% of their assets over the threshold of 4 billion PLN.

Another tax is on the way. The government plans to introduce a tax on retail sales that will affect all retail chains and stores, online stores and petrol stations with sales income exceeding 18 billion PLN a year.

This year’s state spending is planned to reach 368,528,526,000 PLN.

A big portion of the expenditure is to be directed towards financing social reforms, the most notable of which, likely to be introduced very shortly, is the “Family 500 plus” programme, a child benefit system for every family with two or more children. The programme, which the government describes as its priority, will be probably launched in April.

According to the government estimates, the planned GDP growth is to reach 3.8% in 2016, while the annual inflation is to be set at 1.7%. The planned public finance deficit is to be 2.8% of GDP. It is also estimated that the salaries will rise nominally by 3.6% and employment will rise by 0.8%.

Some last-minute changes concerned some heavy cuts in the spending on the Senate Office, Supreme Court, Supreme Administrative Court, Supreme Audit Office and Commissioner for Human Rights. On the other hand, the Sejm voted in favour of an increase in the reserve for preventing and recovery from natural disasters.

The Ministry of Finance describes the budget as safe, stable, and implementing government intentions.

Shortly, the budget will be voted upon in the Senate.