Poland suspends supermarket tax in line with EU demand

Warsaw/ AFP

Poland’s populist government on Tuesday suspended a new tax on supermarkets that targetted foreign-owned chains just a day after the European Union opened a probe into whether it violated competition rules. Announcing the suspension in Warsaw, Poland’s Finance Minister Pawel Szalamacha told reporters the EU investigation was “arbitrary and political”, launched “under pressure from large corporations.”
Warsaw imposed the new tax in July in an effort to finance social programmes and broaden popular support for the Law and Justice (PiS) government.
It largely applied to big groups such as France’s Auchan and Carrefour and Germany’s Lidl or Metro, sparing locally-owned retailers. The European Commission, the EU’s executive arm said Monday it “has concerns that the progressive rates based on turnover give companies with a low turnover a selective advantage over their competitors in breach of EU state aid rules,” a statement said. It ordered the tax to be immediately suspended.
Szalamacha also said Warsaw would launch a new tax on supermarkets as of January, but declined to provide details. Brussels and conservative-led Poland have been caught up in bitter feud over a wave of populist reforms that the EU warns threaten democracy and the rule of law in the ex-communist EU and NATO state.