Poland's parliament has passed an amendment to the act on personal income tax allowing parents to deduct nearly 1200 zloty (400 dollars) per each child from their 2006 income tax – though the new tax break is twice what the government had previously proposed.The annual amount of 1145 zloty in tax relief means 100 zlotys a month more for each child.
The new tax break will already be applicable during the next tax self-assessment in the spring of 2007.
The government wanted the tax relief to amount to 572.54 zloty per child but some opposition parties demanded twice that amount.
"A double tax relief would cost the state budget 6.5 billion zlotys and would be mainly beneficial to the better-off", Jacek Dominik, deputy minister of finance said and explained that the new benefit would be fully exercised only by families with an annual income in excess of 30,000 zloty.
"This amendment is some sort of joke, a parliamentary slip-up", was the comment of vice premier and finance minister Zyta Gilowska. "Such slip-ups do occur during political crises. Only a small group of the rich will benefit from it", she admitted.
An additional 3.6 billion will have to be budgeted for the new tax relief.
Though higher than the government had planned, MPs from the ruling Law and Justice party voted for the new amendment, as did a majority of the opposition MPs. 395 voted for the new amendment.
Only 8 refrained and no one voted against the new tax break.
This is the second family orientated law to have passed in the Polish parliament, which votes for self dissolution tomorrow and a general election is expected this autumn.
Last week parliament voted for an increase in maternity leave and an increase in family allowance payments.