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Polish order. Gowin proposes three tax changes to help local governments

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Tax changes that are part of the Polish Deal program are still subject to consultations. The agreement on Wednesday presented proposals that are to help local governments compensate for the loss of revenues resulting from the Polish Deal. Former Deputy Prime Minister Jarosław Gowin spoke about increasing the share of local governments in PIT and CIT taxes and the need for local governments to participate in VAT.

The head of the Covenant, Jarosław Gowin, spoke about solutions for local governments at a press conference in the Sejm. – Prime Minister Mateusz Morawiecki announced a press conference for today (Wednesday – ed.), At which he will present a new proposal regarding the financing of local governments. We are very happy about it, because we pointed out from the very beginning that the new tax solutions are a deadly threat to local governments and require protective measures. We will see what proposals will be presented by Prime Minister Morawiecki – said the former Deputy Prime Minister.


Polish Order – local governments

At the same time, Gowin recalled the proposals for the Agreement. – The proposals were developed jointly by the Agreement and all local government organizations – he stressed. Currently, the draft tax changes that are part of the Polish Deal are at the stage of public consultations.

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First of all – as the former deputy prime minister said – the agreement proposes to increase the share of local governments in the personal income tax to approx. 60 percent. – Secondly, increasing the share of local governments in CIT to about 31 percent and finally – this is a completely new solution – the share of local governments in VAT. In this case, it would be about leveling the opportunities for economically weaker communes, poviats or voivodships – he explained. – We propose that the commune receives 200 zlotys from VAT per year from each registered resident, the poviat – 75 zlotys, and the voivodeship – 25 zlotys – he explained.

Jarosław Gowin also spoke about the effects of the proposed solutions. – This will ensure stable financing for local governments, it will also fill the gap in local government revenues resulting from the tax changes planned by the government – he noted.

In the regulatory impact assessment attached to the draft tax act being part of the Polish Deal, the government provided, inter alia, calculations regarding the impact of changes on the income of local government units within 10 years from the implementation of the changes. The authors of the draft estimate that in the first 10 years of the new regulations being in force, local governments will lose over PLN 132 billion, while local government associations calculate the loss at 145 billion.

In Gowin’s opinion, “systemic changes are needed as far as the financing of local governments is concerned”. – We should come to a kind of local government tax that will be completely independent of the “whims” of the central authorities

Polish Order – changes in taxes

The most important tax changes included in the Polish Lada include the proposal to increase the tax-free amount from PLN 8,000 to PLN 30,000. Moreover, increasing from PLN 85,528 to PLN 120,000 the tax threshold starting the second income bracket, to which 32% applies. tax rate. At the same time, it was proposed to abolish the tax deduction of part of the health insurance contribution and to replace the flat-rate health insurance contribution currently paid by small entrepreneurs with a contribution proportional to income.

Main photo source: Shutterstock

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