2017-02-02
Communication 3/2017: Disappointing tax revenue in 2016, excessive optimism of plans for 2017
- The data on the state income in 2016 do not indicate any structural change nor a breakthrough increase in tax collection, which was one of key declarations of the ruling party. Higher tax collection rate was supposed to ensure a stable financing of populist, extremely costly election promises (lowering the retirement age, the 500+ program).
- Based on preliminary data from the Ministry of Finance, it can be estimated that in 2016 tax revenues were about PLN 3 billion lower than planned. The higher-than-planned revenues were possible only due to higher non-tax revenue, in particular PLN 7.9 billion from the NBP profit (instead of the planned PLN 3.2 billion).
- For 2017, the Ministry of Finance assumes an increase in tax revenue by 10.4%, although in 2016 this increase was only 5% (instead of the planned 6.3%). This budget assumption serves the government to show – on paper – the financing needed for the harmful lowering of the retirement age.
- The Ministry of Finance has not yet provided their budget implementation report. The figures for the period from January to October 2016 indicate a particularly sharp underexecution of investment expenditure.
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Aleksander Łaszek - Chief Economist at FOR
aleksander.laszek@for.org.pl
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