Poland Overhauls Tax System: Higher Corporate Tax, New Solidarity Levy

Poland's government is set to implement significant tax reforms, including an increase in the corporate income tax (CIT) rate from 19% to 22% for companies earning over 50 million euros annually. This move is part of a broader strategy to adjust the tax system and address public finances.

Additionally, the solidarity tax, levied on individuals earning more than 1 million zlotys per year, will be raised by one percentage point to 5%. The government also plans to revert the revenue limit for lump-sum taxpayers to 250,000 euros (approximately 1 million zlotys), down from the current 2 million euros. These proposals are projected to have multi-billion zloty costs, necessitating the tax increases.

Paweł Wojciechowski, chief economist at the Business Centre Club (BCC), views these reforms as a positive step, shifting the tax burden from employed middle-class individuals to larger enterprises, high-earners, and some lump-sum taxpayers. He notes that the changes aim to be tax-system neutral in terms of public finances, as stated by Minister Domański. The primary beneficiaries are expected to be taxpayers on the standard scale earning over 120,000 zlotys, while larger firms, top earners, and those exceeding the new lump-sum limit will bear the increased cost.

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Zyskają przede wszystkim podatnicy na skali z dochodami powyżej 120 tys. zł, natomiast zapłacą za to głównie duże firmy objęte wyższym CIT, osoby o najwyższych dochodach oraz przedsiębiorcy wypadający z ryczałtu po obniżeniu limitu przychodów do 1 mln zł.

Wojciechowski also supports the reintroduction of an intermediate tax rate of 24%, seeing it as a way to smooth the sharp jump from 12% to 32%. He believes this, combined with the lump-sum changes, will reduce tax arbitrage, discrepancies in taxation based on employment structure, and lessen incentives to switch from the standard tax scale to business activity. However, he questions the narrow 20,000 zloty bracket between the 130,000 and 150,000 zloty thresholds, suggesting a wider range would be logical if the 24% rate becomes permanent.

The economist acknowledges the reform's redistributive nature, aiming to correct issues like excessive tax arbitrage exacerbated by previous policies. He suggests that a more equitable income distribution could foster social stability, boost consumption, and contribute to long-term economic growth. Nevertheless, he cautions that not all redistribution is pro-growth, and entrepreneurial decisions regarding investment and economic calculations remain crucial.

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Reforma ma przede wszystkim charakter redystrybucyjny i częściowo koryguje złe rozwiązania, w tym nadmierny arbitraż podatkowy wzmocniony przez Polski Ład. Bardziej równomierny rozkład dochodów może sprzyjać stabilności społecznej, konsumpcji i w dłuższym okresie wzrostowi gospodarczemu.