Government is unlikely to overhaul Poland’s tax regime

Significance

This continues the policy preference -- out of line with Poland’s peers -- for indirect taxes on goods and services, including a relatively high value-added tax (VAT) rate. The government says the sugar tax aims to curb rising obesity, but critics suspect it is a new way of raising revenue.

Impacts

• Corporate taxes could be raised as an alternative source of revenue.
• Left unaddressed, the regressive trend in taxes and rising inequality may create an opening for the leftist Spring and Together parties.
• If UK taxes rise post-pandemic, the relative fall in disposable income could encourage Polish immigrants to return to Poland.