FinMin Says Cabinet May Decide On Future Of 0% VAT On Food Next Week

Finance Minister Andrzej Domanski told TVP Info this morning that he is in talks with Prime Minister Donald Tusk over the future of VAT on food, which has been temporarily lowered to 0% as an anti-inflation measure. The decision on the matter will be made as soon as next week.

• The government's decisions on anti-inflationary measures (zero VAT on food and energy price cap) have been cited by the NBP as crucial drivers of near-term inflation and important factors in deciding on the optimal rate path. The NBP will announce its next rate decision next week (March 6) and it will be accompanied by an updated macroeconomic forecast.
• According to the Finance Minister, the government takes note of the decline in food prices on international markets, but is also aware of the fact that they constitute a considerable proportion of the typical basket of goods consumed by households. He added that recent price wars between major retail chains suggest that food price increase following the potential return of 5% VAT rate could be "moderate."
• Domanski also said that next week the Cabinet will discuss a proposal to amend the mortgage holidays scheme to make it more beneficial for borrowers.