1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Reforming the Polish Tax System to Improve its Efficiency

The Polish tax system is characterised by high social security contributions for both employers and employees. As a result, Poland has one of the highest tax wedges in the OECD, despite relatively low personal income tax rates. This, combined with a relatively high minimum wage and generous early-retirement and disability benefit programmes, contributes to low employment rates, in particular among low-skilled workers. The system also relies heavily on consumption taxes, whereas relatively little revenue is collected from such bases as environment externalities, inheritances and, in particular, property. One of the key implications of the tax structure is that the system as a whole is one of the least redistributive among OECD countries. This paper reviews the main features of the tax system and explores options to improve its efficiency, including possibilities to broaden existing tax bases as well as to shift the tax burden from labour towards less mobile and distorting sources such as property.

English

Keywords: taxation, corporate income tax, labour tax wedge, personal income tax, tax reform, VAT, property tax, polish tax system
JEL: H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes; H20: Public Economics / Taxation, Subsidies, and Revenue / Taxation, Subsidies, and Revenue: General; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; H22: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Incidence; H25: Public Economics / Taxation, Subsidies, and Revenue / Business Taxes and Subsidies including sales and value-added (VAT)
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