On 15 May The United Right Government presented its new program, announced for some time Polish Deal. Under this name is a proposal for socio-economic change, which is intended to change to a better reality after the pandemic. Covid-19.
But will it be a good change? The following article will look at the main features of the program.
five Pillars
During the Saturday conference Prime Minister Mateusz Morawiecki presented five the pillars to support the programme. They are:
Health services. It is intended to rely on new sources of funding and 7% The product of the National Taxes is intended for health protection.
Changes in the tax system. The most important here is the change in income tax on individuals, i.e. increasing the amount of tax-free and raised so-called second tax threshold. Of course, these are not the only changes.
Changes in pensions.
Home affairs. Here the main change concerns housing without own contribution; according to the Prime Minister, the state will be able to guarantee to 100,000 PLN own contribution to those taking credit. Another, more controversial change, is to be the ability to build houses to 70 m2 without permission.
Investments. As expected by the government, they are to generate 500,000 new jobs.
Key legal and tax assumptions Polish Deal
All the above pillars have, of course, been clarified, some of them with interesting, even groundbreaking legal and tax changes. The most important or at least the most widely commented comments will be discussed below.
The above mentioned increase of the tax-free amount to 30,000 PLN. According to the Prime Minister, this is a revolution for 18,000,000 Poles. According to the clarifications presented, this amendment will mean that there is no need to pay personal income tax for 9,500,000 the least earning Poles, while 8,500,000 pays a lower tax.
This will allow tax exemption from pensions up to 2,500 PLN (is the basic change presented In the third pillar Polish Deal). However, this is not the only positive change for pensioners. If a person intends to work instead of retiring, he will not be obliged to pay income tax.
The next major change is to raise the so-called second the tax threshold. Currently higher tax rate (32%) is paid after exceeding the amount 85,528 PLN. According to the government's announcement, this threshold is expected to rise to an amount 120,000 PLN, i.e. o almost 35,000 PLN. This change will undoubtedly also, in a positive sense, be felt by the least earners.
But in order not to be too ‘pink’, there will also be a change concerning health contributions. It is commented on as quite controversial, especially for entrepreneurs and so-called "self-employed". The interest rate of this contribution is currently at 9% And it won't change.
What may give rise to some resistance is the objective of not deducting the health contribution in the statement of income tax on individuals. Currently, the annual declaration can be deducted from the amount of the input tax paid during the year for health contributions.
Importantly, it is deducted from income tax on individuals, rather than the tax base for other contributions. This means in practice that entrepreneurs and self-employed will pay a higher income tax.
Polish Deal should be consulted with the public
It is stressed that any planned changes should be consulted with employers, entrepreneurs and trade unions. The Polish economy will not be able to achieve full development unless it exploits the potential of the private sector. The announcement of a new programme without a private business arrangement will not help build confidence in a country that is so important to potential investors.