Abstract
The paper aims to present directions for the growth‑enhancing reconstruction of the tax system in Poland. It presents a diagnosis of the main strengths and weaknesses of that system. Based on this diagnosis and a review of the literature, the authors propose a package of recommendations whose introduction would be conducive to economic growth. The recommendations include: shifting the burden of taxation from income, in particular low labour income, to consumption; exempting low earners from a part of social security contributions; the introduction of the possibility for local governments to increase the PIT-free allowance above the centrally set base amount; the unification of the basis for the PIT, National Health Fund and Social Insurance Institution contributions; the elimination of differences in contributions for different types of contracts on the basis of which work is performed; the extension of one‑off amortisation to all machine investments; and the elimination of sectoral taxes.
Highlights
After the fall of socialism, Poland achieved economic success without precedent in its history
Poland has repeated the economic miracle of Germany: since 1989 per capita GDP in the former country has followed almost the same path as in the latter country after 1955.2 Poland is more or less as far away from Germa‐ ny in terms of per capita GDP as it was from Hungary in 1990, which it surpassed in 2012.3 Poland has surpassed two countries of the ‛old’ European Union (EU): Greece and Portugal
If Poland does not continue with its reforms or leaves itself little room for manoeuvre in macroeconomic policy, the Polish eco‐ nomic miracle will come to an end
Summary
After the fall of socialism, Poland achieved economic success without precedent in its history. Poland has repeated the economic miracle of Germany: since 1989 per capita GDP in the former country has followed almost the same path as in the latter country after 1955.2 Poland is more or less as far away from Germa‐ ny in terms of per capita GDP as it was from Hungary in 1990, which it surpassed in 2012.3 Poland has surpassed two countries of the ‛old’ European Union (EU): Greece and Portugal It still lags far behind the EU average. The changes meet three conditions resulting from the analysis carried out in the previous sections: firstly, they are growth enhancing; secondly, they are potentially sustainable as they do not undermine the sustainability of gen‐ eral government; thirdly, they enhance the strengths of the tax system in Poland or mitigate its weaknesses.
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