Analysis of the impact of VAT

Economic growth can be stimulated in many ways. Sometimes these are less fiscal burdens than before, reluctant to be applied even in Poland, and sometimes measures to tighten the tax system. While it is not possible to eliminate the grey economy completely, even in the most legalistic societies, it is possible to significantly increase the state’s revenue and then have the recovered finances at your disposal, while also stimulating the economy.


A recent analysis of the impact of VAT shows that the increase in revenue is linked both to a tightening of the system and to an increase in the economic situation in the country. Poland, as an important piece of the global puzzle, benefits from global prosperity, just as it suffered during the recession of the early 21st century. Increasing VAT receipts also means increasing consumption, sometimes combined with excessive borrowing. Poles are increasingly bold in taking out not only housing loans, but also consumer loans, meeting their desires and real needs. Furthermore, the increase in VAT is linked to the influx of labour from abroad. Even if workers from Ukraine or Belarus are exempt from part of the fiscal burden and send part of their earnings abroad, they have to pay for food, fuel or housing while living in Poland, while also contributing VAT to the Polish budget.

Estimates for 2019

According to government estimates, tax receipts in 2019 are expected to be nearly PLN 20 billion higher than in 2018, of which nearly PLN 13 billion is due to VAT. This is due to increasing consumption, but at a slower rate than in 2018, and the seals of the tax system. However, many experts warn against over-optimistic forecasts, predicting that income growth may weaken in the coming years, because the possibility of increasing tax collection is slowly running out, even with an improved system. In addition, an increase in public expenditure is anticipated, combined with the co-financing of public investment expenditure, part of which will come from the EU budget. Additional expenditure will therefore have a negative impact on public finances.

Delay discrepancies

An analysis of the impact of VAT on the budget after a change in government fiscal policy shows that there are still clear discrepancies between economic growth and VAT receipts. While in 2017, when a record amount of VAT money was collected, the dynamics will decrease in the following year and years. The discrepancies in quotas and plans can also be seen when you analyse the information about the increase in revenue depending on the source. While the media criticising the ruling team mention growth of just over 1%, the Central Statistical Office claims that the national economy has been enriched by over 5% in VAT. The differences may result, among other things, from the accumulation of money by the budget, which is then given back to the entrepreneurs in the next settlement period in almost wholesale quantities.

The analysis of the impact of VAT has never been so unobvious. It seems that experts’ opinions are divided not only because of the research methods chosen, but also because of political sympathies.