July 24, 2019

Polish lawmakers have approved a measure that would exonerate most workers under the age of 26 from income taxes as the country seeks to stem the flow of its young people to other EU nations in search of better paying jobs. The lower house of parliament approved the measure introduced by the ruling conservatives in a vote late Thursday by an overwhelming majority. The bill would exonerate workers under the age of 26 from Poland’s 18 percent personal income tax for those whose gross earnings don’t surpass 85,500 zlotys (20,000 euros, $22,500) per year. That level is higher than Poland’s average income, estimated to be around 60,000 zlotys per year before tax. The approval of the measure by the upper house of parliament and its signature by the president is widely expected. Some two million people could benefit from the measure, according to supporters of the legislation, which should enter into force from August 1. Poland has long been haemorrhaging skilled workers to other EU states where they can find better paying jobs, posing both a long-term demographic risk and short-term problem finding enough labourers to continue the country’s streak of economic growth since the fall of communism in 1989. The measure was one of the campaign promises made by the ruling Law and Justice party ahead of the European parliamentary elections in May, which it won, and legislative elections scheduled for later this year.   Source: france2

The Confederation of British Industry (CBI) has called on chancellor Philip Hammond to drop the idea of a digital services tax because it could end up stifling the digitalisation of UK businesses beyond those that it is intended to target Commenting on the introduction of the tax in April 2020, chief economist Rain Newton-Smith said that there had not yet been a proper economic impact assessment of the tax. “It has the potential to mean companies are less likely to become more digital, when the whole industrial strategy is supposed to be predicated on getting people to start and grow digital businesses,” she warned. The tax is aimed at online marketplaces, social media platforms and search engines with a global turnover in excess of £500m. Digital giants like Amazon, Apple and Google will be charged at a rate of 2% on revenue they generate in the UK. It is intended to be narrowly scoped to ensure that it is the tech giants, not start-ups, which shoulder the burden of the new tax. Initially, Hammond had hoped that other leading economies would agree a joint way forward on digital taxes. But he ran out of patience last year and announced in the October Budget that the UK would be going it alone. “It is only right that these global giants, with profitable businesses in the UK, pay their fair share towards supporting our public services,” he said at the time. “In the meantime, we will continue to work at the OECD and G20 to seek a globally agreed solution and if one emerges, we will consider adopting it in place of the UK digital services tax.” That has not happened yet. Despite the presence of digital taxes on the agenda for discussion at the recent G20 meeting in Japan, the best the G20 finance ministers could do was to aim to agree new rules on cross-border corporate taxes by 2020. This is not surprising, given the obstacles that need to be overcome – including fierce resistance from the US where most of the digital giants are headquartered. Newton-Smith told the Telegraph that she was concerned the tax would catch more businesses in its net than originally intended. “The lines are blurred on what is a search engine or a social media platform and that is a challenge when you have a tax that is based on business models rather than on profit stream,” she explained. “A 2% tax doesn’t sound like a lot but in a high-volume, low-margin business, it could wipe out your profits. When it comes to small businesses, adding to their cost base is not welcome.” The CBI also told the government that its plans to become the world leader in internet regulation, set out in the recent White Paper, do not go far enough. The business organisation wants to see a new independent regulator established as part of OFCOM, great clarity on the definitions, legal responsibilities and scope, proportionate and feasible enforcement measures and joined up government initiatives on tech policy and regulation. It also wants digital literacy to be enhanced across business and the wider UK public.   Source: Ecomonia