The Polish government will build its 2015 budget on 3.8% GDP growth and 2.3% inflation and will retain its heightened VAT rates and continue the freeze on PIT income thresholds and standard deductions, according to the budget plan adopted by the government on Tuesday. In 2015, minimum wage will be increased to 1750 PLN Gross ? decided the Council of Ministers.
– This decision is very bad news. It will not solve the problems of the unemployed and employers with low wages – says expert of Employers of Poland Łukasz Kozłowski.
Minimum wage employees in Poland earn so little because because of very high non-wage labour costs. A person earning 1680 PLN gross receives 1237 PLN net, but the total costs for the employer amount to 2028 PLN. That is how much the employee would earn, if his wage was not dragged down by taxes and social security contributions. Meanwhile, the government freezes the PIT tax rates yet again, which will mostly harm lowest paid employees.
Higher minimum wage will also cause worse business activity conditions for micro-entrepreneurs and the self-employed, as reduced social security contributions paid in the first two years of activity are calculated based on minimum wages. As a result, fixed costs for entrepreneurs will continue to grow.
Unions are pushing for a minimum wage that is equal to 50 percent of the national average wage.
Tax receipts should be 4 to 5% higher than in 2014. An additional PLN 2 billion should come from “tightening” the system.
Sources: www.wbj.pl, www.warsawvoice.pl, www.pracodawcyrp.pl
