Polish opposition propose doubling tax-free income threshold in latest campaign pledge

Poland’s main opposition party, Civic Platform (PO), has proposed doubling the tax-free income threshold to 60,000 zloty (€13,220) per year. It also responded to the ruling Law and Justice (PiS) party’s pledge to increase child benefits next year by submitting legislation that would introduce the hike immediately.

A leading economist has warned that the “spiral of populism” of the two main parties, who are seeking to outbid one another with spending promises ahead of this autumn’s elections, risks raising Poland’s budget deficit to the highest level in the European Union.

Speaking to PO supporters in Kraków on Tuesday, the party’s leader, Donald Tusk, announced that he wanted to double the tax-free threshold from its current level of 30,000 zloty (€6,610).

“This means that anyone earning up to 5,000 zloty gross [per month] will not pay tax,” he said, quoted by Gazeta Wyborcza. According to Statistics Poland (GUS), a state body, in 2022 the average monthly salary was 6,346.15 zloty (€1,397.30).

Calculations by Money.pl, a financial news service, show that someone with a gross monthly salary of 5,000 zloty would pay 188 zloty less in tax per month under Tusk’s proposal.

“We can’t forget about those who work and are not entitled to benefits. Poland must become a welcoming place for everyone who works,” said Tusk on Tuesday. Last week, the PO leader claimed that PiS is supported by – and shares a mentality with – drunk unemployed men who beat women and children.

Tusk also responded this week to the recent pledge by PiS chairman Jarosław Kaczyński to raise payments from the government’s flagship child benefit programme from 500 zloty per month per child to 800 zloty.

While Kaczyński said the change would go into effect at the start of 2024 – that is, after this autumn’s elections – Tusk proposed accelerating that timetable so that it happens in time for Children’s Day on 1 June this year.

PO yesterday submitted two bills to parliament that would introduce increases to child benefits to 800 zloty and the tax-free threshold to 60,000 zloty.

“If Kaczyński does not allow these laws to be processed, he will confirm the idea that the increase of the [child] benefit is just an electoral ploy, that Kaczyński does not want to raise this benefit,” said Borys Budka, the head of PO’s parliamentary caucus.

Kaczyński, however, responded by saying it would be “impossible” to secure the necessary funds for such a large benefits increase in such a short space of time. He criticised PO’s demands as a “political ploy”.

Critics have also accused PO of hypocrisy, noting that when the child benefit programme was first proposed by PiS in 2015 and introduced the following year, figures associated with PO warned that it would be unaffordable.

Later, after those fears proved unfounded and seeing the popularity of the scheme, PO backtracked and pledged that they would not scrap it if they returned to power, as PiS claimed they would.

This week, Szymon Hołownia, leader of the Poland 2050 (Polska 2050) party, called on his fellow opposition leaders not to allow themselves to be dragged into “a race with Kaczyński on [campaign] promises”.

Economist Sławomir Dudek, president of the Institute of Public Finance, an NGO, warned that the “spiral of populism” between the main two parties could have a dangerous effect on the state budget.

He calculates that PO’s proposed tax change, along with increasing child benefits to 800 zloty, would raise the budget deficit to around 190 billion zloty next year, or 5.7% of GDP, which would be the highest level in the EU.

Main image credit: European People’s Party/Flickr (under CC BY 2.0)

Daniel Tilles

Daniel Tilles is editor-in-chief of Notes from Poland. He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, EUobserver and Dziennik Gazeta Prawna.