Poland will lower VAT on some food to zero from 1 February, the country's finance minister said, as part of a programme of tax cuts and cash handouts meant to soften the impact of spiralling inflation on consumers.
Poland had requested approval from the European Union to change its tax regulations to cut VAT on food.
The state-run news agency PAP on Wednesday quoted EU Economic Commissioner, Paolo Gentiloni, as saying zero VAT for food would be legalised for member states in the future.
Private broadcaster Polsat News cited an unnamed European Commission source as saying Poland had obtained informal consent to implement the change immediately.
Earlier this week, Polish prime minister Mateusz Morawiecki hinted at VAT cut at a news conference, saying, "There is a very high chance that from February we will cut VAT on basic food items to zero for at least six months."
Finance Minister Tadeusz Koscinski told Polsat News Warsaw had tacit approval from Brussels for the change and it could be implemented sooner than 1 February but retailers needed time to prepare.
"There are over 1.5 million cash registers in Poland, which would have to be re-registered...we need to wait until 1 February for that reason," he said.
Koscinski said Poland was negotiating with the European Commission to lower VAT on fuel as well.
Asked whether, as some economists estimate, inflation could reach 10% by June next year, he said it could not be ruled out and people should be ready for a worst-case scenario.
"None of us can say whether it will be so high or not, because we do not know what the price of gas or oil will be, and what the zloty exchange rate against the dollar (will be). These are the main factors that cause such inflation," he said.
News by Reuters, edited by ESM. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.