Poland has been at the forefront of the highest taxation burden in Central and east Europe for years. According to the latest data from Eurostat, Poles pay any of the highest taxes in the region, and fiscal burden structure There's quite a few controversy in our country. In 2024 the taxation burden amounted to 38.1% of GDP, which ranks Poland 4th among the EU countries.
It is worth considering why this is the case and what consequences for the Polish economy and citizens have with them specified a advanced level of taxation. What affects the fact that Poles are inactive struggling with tall Fiscal expenditure What's the problem?
High income taxation and VAT
One of the main reasons for advanced taxes in Poland are high income taxation rates and value added taxation (VAT). The VAT rate in Poland is 23%, which is the basic rate among the European Union countries. Although any products and services are subject to reduced rates (8%, 5%), this burden is inactive 1 of the highest in the region.
In addition, income tax Poland accounts for 19% for individuals and 19% for companies, which besides places our country in advanced positions in the region. Growth income taxes and social safety contributions may affect decrease in purchasing power Citizens and braking private sector development.
Wide taxation base in Poland
There is simply a wide taxation base in Poland, which covers both income taxes and another charges, specified as property taxes and fees related to economical activity. These charges combined with VAT and high social safety contributions make a complex network of fiscal commitments.
Reports show Ministry of Finance, 2024 total taxation burden in Poland was 38.1% of GDP, which represents 6.5% more than the EU average. This means that Poles pay comparatively more in relation to income, which puts our country at the forefront of the highest level taxation.
Expensive taxation administration
It should besides be noted that cost of maintaining the taxation administration In Poland it is comparatively high. Expenditure on public administration, including on Anti-tax fraud and tax controlare an crucial part of the state budget. advanced administrative expenditure causes the government to bear additional costs which are then passed on to citizens.
Increase in government debt
Another origin that affects advanced taxes in Poland is the increasing public debt. As a consequence of the economical crisis and the COVID-19 pandemic, the Polish government was forced to borrow and issue bonds, resulting in an increase in public debt. In 2024, public debt was about 56% of GDP, which required an increase in the taxation burden to cover rising debt handling expenditure.
Scale of social inequality
High taxes besides have social consequences. 1 of the biggest challenges in Poland is the scale of social inequality. Although the government is introducing various programmes to support low-income people (e.g. the 500+ programme), we are inactive seeing a large social divide. advanced taxation, which in explanation is intended to finance social assistance, can lead to loss of quality of life any social groups that are forced to bear the burden of advanced taxes.
What changes can happen in the future?
The Polish government, despite the expanding taxation burden, announces further changes in Polish taxation system. 1 of the objectives is to simplify the strategy and introduce more fair fiscal burdenwhich do not adversely affect entrepreneurship and The financial situation of citizens.
Experts point to the request to introduce more progressive income taxesthat could incriminate more wealthy people and corporations. Entrepreneurs besides call for a simplification fiscal charges to increase Competitiveness Polish economy against the background of another European Union countries.
Conclusion
Poland faces a serious taxation challenge. Although the advanced level of taxation burden is aimed at financing government activities and gathering the increasing budgetary needs, this may lead to deeper social inequalities and weakening economical development. Changes in the taxation strategy are necessary, but they must be done in a thoughtful way so as not to discourage citizens and entrepreneurs from doing business.
More here:
Why do Poles pay the highest taxes in the region? Analysis of the situation in 2025
