S&P: Poland's Tax Overhaul to Have Neutral Impact on Debt

Rating agency S&P Global Ratings has commented on Poland's proposed tax system reforms, stating they are expected to have a "fundamentally neutral" effect on the budget deficit and public debt. The Polish government, led by Prime Minister Donald Tusk and Finance Minister Andrzej Domański, announced the changes, set to take effect in 2027.

The reforms aim to reduce personal income tax (PIT) revenues by approximately 10 billion Polish zloty. This shortfall is intended to be covered by increased tax burdens, particularly on corporations. When asked about the potential reaction from rating agencies, Domański expressed optimism for a "slightly positive" response.

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Taking into account the government's statements this week, we anticipate that the tax changes will have a fundamentally neutral impact on Poland's budget deficit and public debt growth.

S&P's assessment aligns with market expectations ahead of Fitch's upcoming review of Poland's public finances. Analysts largely anticipate Fitch to maintain Poland's current 'A-' rating, though potentially with a negative outlook. In its commentary to "Rzeczpospolita," S&P noted that the planned changes in PIT and corporate income tax (CIT) are anticipated to be neutral for public finances. The agency emphasized its long-term perspective on Polish public finances, extending beyond 2027.

"We note that the government has also expressed caution against deepening the budget deficit in 2027, and we will monitor the legislative process and, ultimately, the implications for Poland's fiscal path from 2027 onwards," S&P stated in its comment. Currently, Fitch rates Poland 'A-' with a negative outlook, a rating affirmed in February 2026. S&P has maintained Poland's rating at 'A-/A-2' for foreign currency and 'A/A-1' for domestic currency since May 2026, with a stable outlook.

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We note that the government has also expressed caution against deepening the budget deficit in 2027, and we will monitor the legislative process and, ultimately, the implications for Poland's fiscal path from 2027 onwards.