Poland to Increase Solidarity Tax, Expand Taxpayer Base

Poland is set to increase its solidarity tax, a levy aimed at the wealthiest segment of the population, raising the rate from 4% to 5%. This change, detailed in a new government project, is expected to broaden the tax base by including entrepreneurs who will be pushed out of the flat-rate tax system due to a reduction in revenue limits.

The Ministry of Finance has stated that the increase in the solidarity tax rate to 5% will not alter the number of individuals subject to this additional tax. However, tax experts point out that this assertion may overlook a significant group of taxpayers. Many entrepreneurs currently operating under the flat-rate tax system will lose their eligibility if their revenues fall below the new, lower threshold, forcing them onto a progressive or linear tax scale.

Piotr Hanuszewski, a senior manager at KPMG, explained that entrepreneurs on the flat-rate system are not currently subject to the solidarity tax. "They will lose this privilege if they are forced to switch to the scale or linear PIT," he noted, indicating a potential increase in the number of taxpayers affected by the solidarity tax.

This adjustment to the tax system comes as part of broader fiscal policy measures. The government aims to increase revenue while potentially impacting small and medium-sized businesses that may struggle to meet the revised revenue caps for the flat-rate tax system. The full implications for entrepreneurs and the overall tax revenue are still being assessed.

“

Entrepreneurs on the flat-rate tax are not at all covered by the solidarity tax. They will lose this privilege if they are forced to switch to the scale or linear PIT.