Government proposes new tax rules for Poles

Poland’s government on Wednesday proposed a slew of new tax rules for citizens, including a higher income tax threshold for low earners and a new 24-percent personal income tax rate for middle earners.

Polish Prime Minister Donald Tusk (right) and Finance and Economy Minister Andrzej Domański (left) attend a news conference in Warsaw on Wednesday, Aug. 19, 2026.PAP/Albert Zawada

Prime Minister Donald Tusk said the government was proposing raising the annual income tax threshold to PLN 130,000 from PLN 120,000 and introducing a new 24-percent personal income tax rate for people earning between PLN 130,000 and PLN 150,000 a year.

Tusk said the changes were aimed at easing the tax burden on Poland’s nascent middle class and would take effect in 2027 if approved by parliament and signed into law by the president this year.

Under the current system, personal income above PLN 120,000 is taxed at 32 percent. Under the proposed changes, income between PLN 130,000 and PLN 150,000 would be taxed at 24 percent, while the highest 32-percent rate would apply above PLN 150,000.

„When our earnings exceed PLN 130,000, we won’t fall into the highest tax bracket, with the 32-percent rate, but will pay 24-percent tax,” Tusk said at a news conference.

CIT to rise from 19% to 22% for high earners

He told reporters the tax cuts would cost public coffers billions of zlotys, prompting the government to propose higher taxes on some businesses and high-income earners.

The government wants to raise corporate income tax to 22 percent from 19 percent for companies with annual revenue exceeding EUR 50 million, or about PLN 200 million, as well as for corporate groups.

It also proposes raising the solidarity tax on people earning more than PLN 1 million a year to 5 percent from 4 percent.

The government also plans to restore a lower revenue threshold for businesses eligible for a flat-rate tax. The threshold would be set at EUR 250,000, or about PLN 1 million, down from EUR 2 million at the moment.

Finance and Economy Minister Andrzej Domański said the changes would benefit about 3.5 million taxpayers, with annual savings of up to PLN 3,600.

„This money will stay in the pockets of Poles,” Domański said.

He said the proposed 22-percent corporate income tax rate was roughly in line with the European Union average, noting that Slovakia had recently raised its CIT rate to 24 percent.

Domański said the changes would be broadly fiscally neutral and would not increase the budget deficit.

„We are in dialogue with the European Commission,” he said.

Tusk said the government would not allow the deficit to increase, noting that it currently stands at about 7 percent of gross domestic product.

The government is due to discuss the draft budget at a special meeting on Friday, with the proposed tax legislation expected to be submitted to parliament alongside it following the required consultations.

Tusk said the legislation would need to be passed this year for taxpayers to benefit from the changes in 2027.

He also acknowledged that President Karol Nawrocki could veto the legislation, saying the prospect of a presidential veto made it harder for the government to make decisions.

„It is very difficult to make decisions aimed at changing the law under the threat of a presidential veto,” Tusk said.

Tusk also said the government would not be able to fulfill a 2023 election campaign pledge to raise the tax-free allowance from PLN 30,000 to PLN 60,000 in the near future.

„We are not giving up on this, but I can admit without torture that certainly in 2027 and 2028 … the plan to increase the tax-free allowance is unlikely to be realistic,” he said, citing the government’s expected high defence spending.

Domański has previously estimated that doubling the tax-free allowance would cost the government about PLN 54 billion.

(gs)

Source: IAR/PAP

Radio Poland