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No More Double Tax...

Radio Polonia reports...

Poles working in the United Kingdom will no longer have to pay their taxes twice – first in Britain and then in Poland. This is the outcome of a new deal between the countries.

Report by Gabriel Stille

20.07.06

A fact that might come as a big relief to Poles working in the UK is a new deal which solves one of the questions that many Poles currently residing in Britain have worked for. When leaving for work abroad, Poles are often told about the good wages – but not so often about taxes, fees and of course the high costs of living in a country like Britain, especially if you are staying for a longer time to establish yourself in the country.

Bożena Wilson, journalist at a Polish show at the BBC, has talked to many Poles about their thoughts about the new taxation.

That's the one thing they were fighting for. Because as you know, as people came to England, with the intention of staying here only a couple of years or a couple of months and go back to Poland, save some money here and use this money in Poland, but the reality was different. They had to pay, on top of the taxes here in England, National Health System fees and various taxes to the Polish government. So they were frustrated, they were angry, and they said to me, that they were not going to go back to Poland! For that reason. Why Polish government should take taxes from them when they already paid taxes?

Moreover, Bożena Wilson thinks this new rules will give Poles in Britain the feeling of a greater flexibility – to be able to go back and take a job in Poland if that opportunity arises, and then be able to save some money which would otherwise go to taxes.

Stanisław Gomułka, chief economist at the PZU group in Warsaw, and former professor at London School of Economics, thinks that this reform will make Poles working in Britain more inclined to give the truth about their incomes to both governments. The inflow of capital from Poles working abroad is substantial.

We estimate, that something between one and two million Poles work abroad, and that during the last two years, additionally perhaps 300.000 emigrated to Western Europe and the United States, especially to Great Britain and Ireland. And one million workers abroad represents something like 5 billion euro transfers to Poland, which is something like 2 % of total Gross Domestic Product. So this is actually supportive of individual consumption, of domestic demand, and in fact right now is helping to accelerate economic growth in Poland.

There are still different opinions about whether the big labour migration will ultimately be a good thing for Poland or not – according to Gomułka it depends mostly upon further developments in Poland and if the Poles abroad are inclined to come back

This people, if they take up jobs abroad, that would benefit them and it would benefit Poland as well as the country where they work. However, if big numbers emigrate, and we have labour shortage developing in Poland, then of course the situation would be different. But right now, the unemployment rate among graduates is huge, 30-40 %. So, as long as we have that kind of situation, if this people actually increase their skills (also including linguistic skills) and earn some money, it would benefit them and their families, and return to Poland after some time, they could actually bring in some know-how etc, so that would be beneficial.

The new tax deal could bring the situation closer where the consequences, for all parties, of the new labour migration with the European Union is clearer to see.

posted by: Oborski at 01:59 | link | comments (1) |