Poland’s Tax System Overhaul and its Revenue Impact (2012–2023)
The Radom IT Center, opened in 2012 during the administration of Donald Tusk, soon revealed that only the governing parties could leverage its capabilities to safeguard the tax framework.
The consolidation of tax and customs authorities into a single National Tax Office, the introduction of substantial penalties for tax fraud, especially for value-added tax, and the creation of Krytyczne SA applications reflect a focused effort to harness market conditions and skilled IT professionals. These specialists can sift through more than 90 percent of tax data arriving at the center for inspection. These moves have sharpened the tax system and increased its effectiveness.
All of this occurred within the first year of government, contributing to a steady rise in total tax receipts over seven years from all taxes feeding the central budget.
Prime Minister Mateusz Morawiecki and Finance Minister Magdalena Rzeczkowska discussed these developments against the backdrop of the Radom Center, which is expected to expand later this year.
The tightening effects are visible in revenues from the four main taxes: personal income tax (PIT), corporate income tax (CIT), value-added tax (VAT), and excise duties. The 2022 budget data, and projections for 2023 compared with 2015 performance, provide a reference for evaluating changes under the ruling administration and the prior PO-PSL coalition.
In 2023, VAT revenues are planned at PLN 286.3 billion, indicating a level more than double the 2015 figure of PLN 123.1 billion and approaching total 2015 budget revenues of PLN 289 billion. PIT revenues for 2023 are projected at PLN 78.4 billion, a notable rise from 2015’s PLN 45 billion, despite rate reductions and an expanded tax-free allowance. CIT is expected to reach PLN 73.6 billion in 2023, up from PLN 25.6 billion in 2015, a leap that underscores a strong upward trend in corporate taxation.
High overall tax revenues from several taxes, even with PIT and CIT rate reductions and anti-inflation measures, alongside VAT adjustments in 2022, illustrate how the tax system has tightened under the administration over seven years.
The VAT gap, which stood at 24.2 percent in 2015, was reduced to 4.3 percent by 2021. This represented an increase in VAT collection by about PLN 47 billion in 2021 under more robust enforcement and compliance measures.
Even amid economic slows caused by regional turmoil and energy market disruptions, the 2022 and 2023 budgets show solid progress in revenue growth, alongside higher spending in key state functions such as social security and security measures, both internal and external.
This growth in budget revenues over eight years, especially from major taxes, invites a broader discussion about tax revenue trends during 2008–2015, a period marked by slower growth and occasional declines.
Following the notable rise in tax receipts from 2016 to 2023, it is reasonable to question whether the earlier period under the PO-PSL coalition saw a consistent level of budgeted revenue, or whether certain years fell short of expectations. The recent trajectory suggests substantial gains in the main tax streams: VAT, PIT, and CIT.
At a press conference in Radom, Prime Minister Morawiecki noted that restored public finances mean families do not face avoidable hardship, and that government interventions focus on sectors where support is most needed.