Flat Tax Progress in Hungary and Poland

While most other East European nations have adopted pro-growth flat tax systems, Hungary and Poland are still burdened by class-warfare systems that penalize people for contributing more to economic performance. The Budapest Times, however, reports that Hungary’s small parties may combine to push through an 18 percent flat tax:

MDF leader Ibolya Dávid called for opposition parties to attend talks on 15 April to work out details of a bill to submit to parliament by May. The party wants to emulate regional peers such as Slovakia and Romania by introducing a flat 18% personal income tax to reduce a tax burden it called “unfairly high”. The Free Democrats (SZDSZ) and main opposition party Fidesz - along with its ally the Christian Democrats (KDNP) - have said in the past that they would favour a flat tax. …The MSZP has only 190 seats in the 386-seat parliament, meaning that the opposition parties could force through a flat tax bill by banding together. Hungary is ranked as having the second-highest tax burden for single people, behind Belgium, amongst the members of the Organisation for Economic Cooperation and Development (OECD). Many feel the high burden - made worse in 2006 when the government hiked taxes as part of its economic reforms - damages Hungary’s regional competitiveness.

Meanwhile, the Polish government already has promised to implement a flat tax, but a key official has suggested that the new system may be implemented in 2009 rather than in 2010 or 2011 as originally planned. Because of its size and geography, Poland’s shift to a flat tax would be a momentous development and could sharply increase the pressure for pro-growth reforms in Old Europe:

According to Zbigniew Chlebowski, head of ruling Civic Platform’s (PO) parliamentary club, there is a possibility of introducing a flat tax rate as early as 2009. Chelbowski said that Prime Minister Tusk supports this option and is ready to fight President Kaczynski should he veto it. Chelbowski, however, did not give a concrete rate of the possible flat tax, but stressed that it shall surely be lower than 18 percent, because such a rate would be higher than the present tax rates. The final decision is to be made in July or August. The ruling Civic Platform had originally planned to introduce the new tax in 2010 or 2011.


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Poland's PKO BP picks ex-central banker Pruski as new CEO

WARSAW (Thomson Financial) - Poland's second-largest lender PKO BP SA named former central bank deputy governor Jerzy Pruski as the new chief executive, it said in a statement.

Pruski, aged 49, left the central bank earlier this year after a much publicised row with central bank's governor Slawomir Skrzypek. Before that, he sat on the bank's monetary policy council from 1998 to 2004 and was a deputy chief executive at small LG Petro Bank throughout the 1990s.
e will succeed Rafal Juszczak who, during his 10 month stint at PKO, transformed the sleepy state-owned lender into an aggressive player on the country's booming mortgage market.

While shares in PKO have lost more than eight percent over the last year, the bank has outperformed its peers thanks to rapidly improving results.

The key task facing Pruski will be to regain PKO's position as the largest bank in Poland after it dropped into second place following a merger of the local units of Italy's UniCredit S.P.A. last year.

He will also have to complete a long-delayed rollout of a single software system and shrink the bank's large workforce, a legacy of its past as leading communist era savings bank for ordinary Poles.

Pruski will take over running the bank on May 20
Source: By Piotr Skolimowski, hemscott.com

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Indian IT R&D, service centre in Poland

Indian integrated solutions provider Wipro Technologies will open a European research & development and service centre in Wroclaw, southwest Poland.

The company will employ over 200 Polish and international IT specialists who can speak English and German, Gazeta Wyborcza daily has found out unofficially.

‘Our IT specialists will try to find out how to manage people’s work in corporations more effectively using sophisticated applications,’ an anonymous negotiator has revealed.

The newspaper’s sources also reveal that the new investment to be conducted in co-operation with the Credit Suisse Group will be announced at a joint press conference by the Mayor of Wroclaw Rafal Dutkiewicz and Ambassador of India to Poland Chandra Mohan Bhandari.

When asked about the new IT centre, the Wroclaw Town Hall told journalists to ‘wait till Monday’. The Wipro Technologies HQ in Bangalore, India has also refused any comments.

When Wipro Technologies was established in 1945, it was predominantly a vegetable producer, but the owner of the company Azim Premji transformed it into a global supplied of IT solutions. In 2007, its revenues amounted to 5 billion US dollars.
Source: polskieradio.pl

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Poland sells more than planned at bumper treasury bill tender

WARSAW (Thomson Financial) - Poland sold a total of 4.71 billion zlotys of treasury bills at a tender today, more than the initially planned offer of 4.5 billion, as investors bid for a total of 8.8 billion of the papers, the finance ministry said in a statement.

The ministry said it sold 3.13 billion zlotys of 52-week bills at a minimum price of 9,390.87 zlotys, 1.0 billion of 26-week bills at a minimum price of 9,691.57, and 572.5 million of 13-week bills at a minimum price of 9,848.39.

The average yield at the tender ran from 6.061 percent for the 13-week papers, to 6.220 percent for the 26-week bills and 6.380 percent.
Source: by Paweł Sobczak, forbes.com

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Business Poland: US Dollar Drops Again Against Polish Zloty

Warsaw, Poland - 12 April, 2008 The US dollar continued its slide against the US dollar on Friday and is now quoted by the National Bank of Poland at 216.00 Zloty per 100 USD.

The continued weakening of the dollar against the zloty, combined with increasing energy prices, is having a negative effect on some Polish manufacturers that depend on the US market. The famous Polish glass industry, being energy dependent and high quality, is being hit particularly hard.

The exchange rates quoted by the National Bank of Poland for all currencies is updated on line each day and can be seen at NBP .


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