Tax In History: Polish Tax System In Transition To Democracy And Market Economy

Abstract

This article briefly discusses tax developments connected with the transformation of Poland from a communist (socialist) state with a centrally planned economy to a democratic state with a market economy. The key feature of Poland’s pretransition tax system was a strong differentiation between taxpayers according to their belonging to the dominant socialized (state or cooperative) sector of the economy or the severely reduced nonsocialized (private) sector to the detriment of the latter. The tax system was based primarily on the flow of tax money between state-owned enterprises and the state budget. Tax rules were, to a large extent, included in governmental instead of parliamentary legislative instruments. Although the fall of communism in Poland is associated with the first partially free parliamentary elections in 1989, democratic elements had been gradually reintroduced into the Polish tax system from the beginning of the 1980s: the nullum tributum sine lege principle in 1980, judicial control over tax administration in 1981, and the principle of equality in taxation of entrepreneurs regardless of their ownership status (socialized vs. non-socialized economy) in 1988. However, new taxes suitable for the changed political, social, and economic reality were introduced in a few steps between 1989 and 1993. The system evolved in the following years with the most significant post-transition changes being connected with the preparations for accession to the EU Post-communist tax system, post-socialist tax system, Poland, Polish tax system, Polish tax transformation, tax transition, tax reform, fall of communism, transition from communism.