Commission Report (2002): Poland

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 29: Financial and budgetary provisions

Progress since the last Regular Report

Poland has made modest progress in this area since the last Regular Report.

Further progress has been achieved concerning the national budget and EC co-financed measures. An amendment to the Public Finance Act providing for multi-annual budgeting in Poland has been adopted. This regulates the relationship between foreign assistance funds and the state budget and will allow multi-annual co-financing of assistance projects from the assistance funds. (See Chapter 21 ­ Regional Development and co-ordination of Structural Instruments)

As regards the own resources system, some further progress can be noted. In January 2002 a unit to co-ordinate the administrative preparations of the own resources system was created within the Ministry of Finance and in March 2002 Poland adopted a detailed timetable of actions regarding the responsibilities within the Polish administration in the area of own resources.

With regard to the VAT resource, the Ministry of Finance has begun to prepare the draft VAT statement and first preliminary budgetary calculations of Poland's overall contributions to the EU budget have been conducted

National legislation for collecting sugar production levies, in line with Community sugar provisions, came in force as from October 2002.

Overall assessment

The necessary legal framework for collecting the own resources is in place. In terms of Poland's administrative capacity, all the institutions necessary for applying the own resources system already exist but for some of them the responsibilities and organisational structure are still to be specified. The co-ordinating unit created within the Ministry of Finance in January 2002 is still understaffed. This unit is supposed to co-ordinate the establishment of the necessary procedures, infrastructure and capabilities to fulfil the administrative conditions in the area of own resources and would co-ordinate from accession as a permanent own resources unit, the calculation, control and payment of own resources and contacts with and reporting to the Commission in this area. Its administrative capacity needs to be considerably strengthened.

The Polish administration has adopted a timetable of actions, made progress in terms of basic analysis and made the first calculations. co-ordination between the institutions involved should however be further improved, and the links between the system of own resources and the state budget should be established.

As noted under chapter 25 (Customs Union) Poland has made significant efforts to align with the Community Customs code. Sufficient staff and an adequate infrastructure for collecting customs duties are available. However, the new customs clearance (CELINA) and accounting (ZEFIR) systems have yet to be implemented in all regional Customs Chambers and their customs offices. A sugar unit exists within the Agricultural Market Agency but the procedures for collecting, accounting for and controlling sugar levies have still to be defined and put in place. The systems and procedures for keeping the 'A' and 'B' accounts, for making traditional own resources (TOR) available and for reporting on cases of fraud and irregularity still need to be set up. The responsible service for conducting internal checks/audits in the area of TOR has also yet to be determined.

With regard to the VAT resource there has been a significant effort to align with Community legislation. Considerable efforts are required in order to be able to calculate the weighted average rate (WAR) in accordance with ESA-95 and to determine the impact on the VAT base of any special arrangements agreed under the Taxation Chapter. Poland should continue to participate in the VAT simulation exercise, which is the key tool for effectively testing its capacity regarding the VAT resource. Sustained efforts are also needed to improve the actual collection and control of VAT. Another problem remaining is that the classification of goods for VAT purposes is not yet consistent with the classification of products used by the Central Statistical Office (GUS). Moreover, GUS does not have access to detailed figures from the VAT administration system.

As far as the GNP resource is concerned, Polish national accounts are fairly complete and the concepts used are in general in accordance with ESA-95 requirements, with some exceptions. The Central Statistical Office has made efforts to ensure and improve the exhaustiveness of GNP statistics (investigation of hidden economy, survey of non-registered exports and imports, compilation of supply and use tables). Nevertheless, in order to fully comply with the acquis, further efforts and fine-tuning remain needed on methodology, quality and completeness of data. Also, Poland should ensure an appropriate staffing and sufficient staff training in the national account Unit. The full acquis implementation could be accelerated by enhanced co-operation between the responsible authorities.

With regard to the control of future EC own resources, Poland should continue its efforts to set up effective instruments to combat VAT and customs duty fraud so that the financial interests of the EC can be protected.

Conclusion

In its 1997 Opinion, the Commission concluded that, in order to ensure that own resources were established, monitored and made available in line with Community regulations, Poland would have to overhaul its existing customs system. Furthermore, for the purposes of accurately calculating the GNP resource, considerable improvements would have to be made to the national accounts to ensure that they were reliable, homogeneous and complete. The Commission added that improving the statistics would also be essential for drawing up the VAT own resources base, which would mean bringing Poland's VAT system fully into line with the Community directives.

Since the Opinion, Poland has made steady progress in these areas, in particular as regards the alignment of its customs system and progress towards applying the ESA-95. The legal framework for budgetary management and for the transparency and efficiency of financial flows to and from the EC budget is in place and Poland has achieved a high level of alignment with the acquis. The level of administrative capacity does not show a similar state of advancement.

Negotiations on this chapter continue. Poland is generally meeting its commitments made in the accession negotiations in this field.

In order to complete preparations for membership, Poland's efforts should now focus on its administrative capacity to be able to implement the own resources system and in particular on ensuring the timely operation of the customs clearance and accounting information technology systems, on improving its calculation of the VAT base and on setting up a series of procedures (for collecting, accounting for and controlling sugar levies, for keeping 'A' and 'B' accounts, for making own resources available and for reporting on cases of fraud and irregularity). Further efforts are needed with a view to securing co-ordination between the relevant authorities.

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