Poland to keep cosmetic excise duties

Related tags European union

Poland's public finance committee has recommended the government to
keep the excise taxes on cosmetics. The decision - reached by a
marginal vote - makes the country the only EU member state to
harbour such a duty.

20 members of the committee supported the Senate's bill to lift excise duty - the duty included alongside VAT in the price of both domestic and imported products, such as perfumes and cosmetics - whereas a thin majority of 22 committee members were against the proposal.

The committee voted that the current tax laws be kept for cosmetics, which earns the state budget €25 million annually, and advised against the introduction of duties on yachts and electronic appliances.

Deputy Finance Minister Robert Kwasniak claimed that lifting the tax would only serve to benefit already rich cosmetic and perfume manufacturers.

However Polish cosmetics manufacturer and distributer are set to profit anyway from the opening up of new markets when the country enters the European Union in May.

For example, Oceanic, a Polish cosmetics company that operates in Russia, the Czech Republic and the US plans to launch its products in Hungary, Greece, Ukraine and Bulgaria by the end of this year.

"Poland's entry into the EU will considerably simplify our expansion into this vast market with over 300 million potential new clients. We are planning to increase sales revenues by 15 per cent to 20 per cent," said Dorota Soszynska co-owner of Oceanic.

The Sejm - Poland's parliament - is likely to follow the committee's recommendation on the excise issue.

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