Shares in Central Government Income Taxes as a Revenues Source of Urban Municipalities in Poland

Abstract

In Poland, local government shares in personal income tax (PIT) and corporate income tax (CIT) are included in their own revenues. Along with the increasing scope of own tasks implemented by the municipalities, which was the effect of advancing decentralization, the legislator granted to municipalities’ larger part of PIT and CIT taxes collected on their territory by the budget. This analysis is aimed at examining the significance of shares in PIT and CIT constituting the revenues in all Polish urban municipalities in the years 1996–2014. The conducted analysis of data from the years 1996–2014 shows the existence of significant differences between the urban municipalities in Poland in the scope of acquired shares in PIT and CIT. This diversity has its basis both in different tax bases of the urban municipalities in PIT tax and CIT tax. However, while the CIT tax plays a small role in the budget revenues of most municipalities, in the case of PIT its share in general revenues can be recognized as relatively significant. By examining changes in the scope of scale of funding the urban municipalities with above-mentioned revenues, it can be noted that despite the increase in the percentage rate of share in the case of PIT, the share of this type of revenue in the budgets of municipalities did not increase in significant manner.