The Polish Parliament, the lower house of parliament (Sejm), on Thursday voted in favour of reducing the Personal Income Tax (PIT) rate to 12 per cent from 17 per cent as of July 1, 2022.
The bill was supported by 246 lawmakers, with 40 voting against and 170 abstaining.
Under the adopted bill the tax threshold of PLN 120,000 (EUR 25,718) and the tax-free allowance of PLN 30,000 (EUR 6,430) will remain unchanged.
At the same time, some entrepreneurs will be able to deduce a part of healthcare insurance premiums from their tax base.
According to the government, the tax changes, whose annual cost has been estimated at PLN 15 billion (EUR 3,21 billion), will be beneficial to some 13 million Polish taxpayers.
The recently introduced tax relief for the middle class will be abolished as the solution proved to be too complex even to tax advisors and accountants.
Instead, taxpayers will receive from the tax office a refund of the difference between the tax due and the tax calculated using the middle-class allowance.
The adopted bill is meant to correct the Polish Deal, the government’s flagship tax reform programme which introduced a new, more progressive tax system. Most Polish taxpayers were not satisfied with the unclear changes implemented.