Communication 28/2018: The budget for 2019: new taxes
• The fast economic growth, in place since 2014 due to the good economic situation in the global economy, leads to an increased state's income. Combined with the limited growth rate of some expenditures, it gives the government more room for maneuver. Regrettably, in Poland the PiS government uses this favorable economic conditions to finance new spending (the program 500+, lowering of the retirement age), rather than to limit the deficit and prepare public expenditures for the next slowdown of the economy. While, according to the prognosis of the European Commission, thirteen of the EU member states plans surpluses, the deficit of Polish public finances will reach 1.4% of GDP.
• Citizens find it difficult to notice an increase in fiscal burden different than an increase in the tax rates. PIT thresholds are still frozen, which increases the revenues of the state by about PLN 1 billion annually, and the separation of revenue sources in CIT from 2018 means an effective increase in corporate taxation by about PLN 2 billion a year. Besides, it should be noted that the PiS government prevents the expiry of higher VAT rates (about PLN 7-8 billion per year).
• In addition, the PiS government introduces new tributes for the coming years. In 2018, a "recycling fee" has been introduced (PLN 1.2 billion), in 2019 an "emission charge" will come in force (PLN 1.7 billion), and from 2020 a "solidarity contribution" (PLN 1.2 billion) will apply.
• A continuing source of uncertainty is the issue of changes to the pension system – even now, less than three months before the end of the year, next years premiums are still unknown. Lifting the upper limit on pension premiums and introducing a PPK (employee capital plan) would mean that the insured will pay over PLN 7 billion more in additional contributions.
Authors:
dr Aleksander Łaszek, FOR Chief Economist
Rafał Trzeciakowski, economist
rafal.trzeciakowski@for.org.pl
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