Open AccessDirections for the Reconstruction of the Tax System in Poland – a Growth‑Enhancing Proposal
Author(s) -
Jakub Karnowski,
Andrzej Rzońca
Publication year - 2021
Publication title -
acta universitatis lodziensis. folia oeconomica
Language(s) - English
Resource type - Journals
eISSN - 2353-7663
pISSN - 0208-6018
DOI - 10.18778/0208-6018.353.05
Subject(s) - allowance (engineering) , social security , unification , economics , work (physics) , public economics , consumption (sociology) , institution , social insurance , scope (computer science) , operations management , political science , market economy , computer science , engineering , mechanical engineering , social science , sociology , law , programming language
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.