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Poland: Government Hopes To Increase Foreign Investment

Warsaw, 17 July 1998 (RFE/RL) -- The Polish government is proposing a major reduction in corporate taxes to attract foreign investment.

Deputy Premier and Finance Minister Leszek Balcerowicz announced last week that his ministry plans to cut the rate of corporate taxes from 36 percent to 30 percent within two years. The plan will have to gain an approval of the entire Council of Ministers before being sent to the parliament for debate.

Analysts regard high corporate taxes as creating obstacles to foreign capital, which, in turn, is necessary to secure development and modernization of the Eastern economies.

Poland leads Central and East European countries in the amount invested by foreign companies, reaching $21.6 billion after six years. Hungary leads in per capita foreign investment with $17 billion with a population of 10 million (Poland is four times more populous).

Zbigniew Olesinski, head of the Polish Agency for Foreign Investment (PAIZ), has said that about $4 billion were invested in Poland during the first five months of the current year. He also said that a further $5 billion are expected to be invested by the end of the year.

The United States is the largest foreign investor in Poland, with almost $4 billion, followed by Germany ($2.1 billion) and international financial institutions such as the European Bank for Reconstruction and Development ($1.7 billion).