Directions for the Reconstruction of the Tax System in Poland – a Growth‑Enhancing Proposal

Abstract

The paper aims to present directions for the growth‑enhancing reconstruction of the tax system in Poland. It presents a diagnosis of the main strengths and weaknesses of that system. Based on this diagnosis and a review of the literature, the authors propose a package of recommendations whose introduction would be conducive to economic growth. The recommendations include: shifting the burden of taxation from income, in particular low labour income, to consumption; exempting low earners from a part of social security contributions; the introduction of the possibility for local governments to increase the PIT‑free allowance above the centrally set base amount; the unification of the basis for the PIT, National Health Fund and Social Insurance Institution contributions; the elimination of differences in contributions for different types of contracts on the basis of which work is performed; the extension of one‑off amortisation to all machine investments; and the elimination of sectoral taxes.

Determinants Of The VAT Gap In The European Union: An Empirical Evidence with Corruption Control As A Moderating Variable

“…Economic growth indicates an increase in economic activities/transactions that add value (Andreescu, 2021). This will then increase the tax base and revenue from value-added tax (VAT) (Karnowski & Rzońca, 2021). Increased VAT revenue will reduce the difference between actual tax revenue and potential VAT revenue, indicating a decrease in VAT Gap.…”

“…To address the potential tax revenue loss due to the VAT Gap, a country will aim to boost economic growth as a tax base expansion strategy (Karnowski & Rzońca, 2021). Economic growth represents an increase in economic activity that raises income, profits, and ultimately tax payments.…”