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I UNDERSTAND
English Section

Polish gov't backs 'historic tax cuts': PM

08.09.2021 20:45
Poland's government has approved a set of "historic tax cuts" that will leave billions in the pockets of the citizens, Prime Minister Mateusz Morawiecki said on Wednesday.
Polish Prime Minister Mateusz Morawiecki speaks at a news conference in Warsaw on Wednesday.
Polish Prime Minister Mateusz Morawiecki speaks at a news conference in Warsaw on Wednesday.Photo: PAP/Radek Pietruszka

Speaking to reporters after a Cabinet meeting, Morawiecki said some 18 million people stood to gain from the new rules.

Overall, for 90 percent of taxpayers the changes would be positive or neutral, he added.

Morawiecki hailed the tax changes, which come as part of a package of socioeconomic policies called the Polish New Deal, as a "groundbreaking" move.

"Nine million Poles, whether workers or pensioners, will cease to pay personal income tax," he told a news conference, adding that some PLN 16.5 billion (EUR 3.65 billion, USD 4.3 billion) "will remain in the pockets of taxpayers."

Morawiecki argued that Poland's taxation system was previously "turned on its head," with the wealthy coughing up a much lower proportion of their earnings to the taxman than the less well-off.

Now, in "a major step towards building the nascent Polish middle class," the tax-free allowance will rise from PLN 3,000 to PLN 30,000 for most taxpayers, and the lowest income tax bracket will be increased from PLN 85,000 to PLN 120,000, Morawiecki said.

Bid to fast-track home building

At its meeting on Wednesday, the government also adopted a bill to fast-track the construction of residential buildings of up to 70 square metres in size, state news agency PAP reported.

The plan aims to help Poles "realise their dreams" of owning a home, Morawiecki said, adding that "it may not suit big developers, but it suits ordinary people."

In another announcement, Morawiecki said the government had adopted a bill on state guarantees for mortgage payments, calling it "a key policy" to support families and the country's fledgling middle class.

New tax on big companies

Moreover, the government has approved a new tax on big companies, Morawiecki told reporters, saying that it would be levied on "large, often multinational, corporations, which pay little or no corporate income tax."

He added that proceeds from the new tax—"some PLN 2 billion" annually—would be used to "strengthen social policies."

Morawiecki argued that similar rules existed in the United States as well as European countries such as Austria.

'Tax justice for all'

He told reporters that the planned tax changes came as part of the ruling conservatives’ flagship Polish New Deal programme and could be "summed up in one sentence: tax justice for all and huge support for the health service."

The governing conservative party’s ambitious Polish New Deal economic programme, unveiled in May, aims to boost the economy after the pandemic, plough more money into public healthcare and education, and give parents extra social benefits.

(pm/gs)

Source: PAP