The importance of municipal tax policy in shaping forest tax revenues in Poland

Abstract

Motivation: The subject of interest presented in this study is the problem of forest tax and the respective municipal revenues in the context of the principle of financial independence. It is manifested in the ability of implementing own tax policy, i.e. exerting purposeful influence on the structural elements of taxes by the local authorities aimed at using their functions in an optimal manner. Forest tax as a typical local tax may contribute towards implementing this principle in practice. Aim: The study presents the legal structure of forest tax, primarily in the context of the powers granted to municipalities in terms of fiscal power. The main objective of the study is to assess the impact of tax policy implemented by municipalities on the amount and importance of forest tax revenues in the financing structure. Results: Comparing to other revenue categories, the fiscal efficiency of tax and its importance in the municipal financing structure remain small (approx. 0.15% of total revenues) and they depend directly on the tax base. It is a derivative of the forest area being the tax base and the structure considered in terms of statutory exemptions and the method of determining the tax rate. Municipal tax policy regarding the forest tax is characterised by a very small activity. A more liberal tax policy is usually associated with a lower tax im-

Local tax policy: How do local governments in Poland shape their revenues?

“…Local authorities in Poland have a significant influence on tax policies (Dziuba & Życzkowska, 2021). They have the autonomy to make decisions regarding local taxes, such as setting tax rates and determining the tax base.…”

“…They also have the power to grant reliefs or exemptions for certain taxes (Swianiewicz & Łukomska, 2016). Moreover, local authorities in Poland closely monitor tax rates in neighboring municipalities and take them into consideration when making decisions on their own tax policies (Dziuba & Życzkowska, 2021). This suggests that local authorities in Poland are aware of the competitive nature of tax rates and how they can impact their municipality's attractiveness to businesses and individuals (Felis et al, 2019).…”

“…Furthermore, the changes in the position of the government and the expected alterations in taxation have a significant influence on the local tax policies. These local tax policies play a crucial role in determining the financial resources available to local authorities for providing public services and infrastructure development (Dziuba & Życzkowska, 2021). The purpose of this article is to examine how local authorities in Poland shape their own revenue through tax policies and the factors that influence these decisions.…”

“…, they still have some discretion in deciding upon local taxes, which sets Poland apart from many other countries in Central and Eastern Europe. This limited tax autonomy influences the local tax policies implemented by municipalities in Poland(Dziuba & Życzkowska, 2021). Factors such as the need for revenue diversification, the desire to achieve fiscal stability, and the aim to finance investment projects also influence local tax policies in Poland(Swianiewicz & Łukomska, 2016).…”

The use of selected tax tools for the implementation of pro-ecological goals in Poland on the example of cities with poviat rights

“…On the other hand, the shortage of publications presenting the results of empirical research on the use of tax instruments to achieve pro-environmental goals is clearly visible. The few in this respect include an article published a few years ago, in which the tax system of cities with poviat rights in Poland was examined in terms of the use of pro-ecological tax reliefs and exemptions (Dziuba, 2015) and the second one presents the results of research on the use of forest tax (Dziuba & Życzkowska, 2021). Huterska & Huterski (2014) also wrote about exemptions in property tax treated as an instrument for influencing the city's sustainable development, analyzing the solutions used in the Polish city of Toruń in 2010-2014, and concluding that tax preferences supported revitalization of the Old Town areas in this urban center.…”