PIT vs 800+, 13. i 14. Emerytura: Petycja o Zniesienie Podatku dochodowego

A petition has been submitted to the Polish Parliament proposing the elimination of personal income tax (PIT) in exchange for the abolition of the “Family 800+,” “13th pension,” and “14th pension” programs. The proposal, according to its author, would be budget-neutral, simplify the tax system, increase citizens’ net income, and establish compensatory mechanisms for local government units to ensure their financial stability. The petition cites data from the Ministry of Finance and previous budgetary analyses, arguing that eliminating PIT and the social programs could provide a widespread, fair, and transparent solution.

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A proposal to abolish Poland’s personal income tax (PIT) in exchange for ending the “Family 800+,” “13th pension,” and “14th pension” programs is currently under consideration by the Sejm, the country’s lower house of parliament. Robert Ołdakowski is the petitioner, formally requesting legislative action to overhaul the tax and social welfare system, citing the law of July 11, 2014, on petitions. Ołdakowski’s proposal centers on “the abolition of personal income tax (PIT) in exchange for the elimination of the 800+ program and additional pensions (“13th” and “14th”)”. He also calls for “a compensatory mechanism for local government units in connection with the loss of PIT revenues.” The stated goal is to maintain budgetary neutrality, streamline the tax system, and create a more equitable and universally accessible solution benefiting all taxpayers.

Financial Balance According to the Ministry of Finance – Eliminating Both Sides of the Equation as a Neutral Solution

The petition’s justification relies on official data from the Ministry of Finance and budgetary analyses, indicating that eliminating PIT alongside the 800+, 13th, and 14th pension programs would have a neutral impact on the state budget. As stated in the petition: “The elimination of both sides of the equation would be neutral for the state budget: revenues from PIT in 2024 amounted to approximately PLN 97.6 billion, while the total cost of the “800+” program (approximately PLN 70 billion), the “13th pension” (approximately PLN 13 billion), and the “14th pension” (approximately PLN 14 billion) totaled approximately PLN 97 billion. PIT revenues are almost equal to the expenditure on these three benefits.”

The document also notes that the solution remains neutral with respect to the health contribution, as the possibility of deducting it from tax was effectively eliminated when the tax-free allowance was previously raised to PLN 30,000. The petitioner also points out that “introducing appropriate compensation for local government units guarantees their financial stability” and that “the obligation to have a PIT does not arise from EU law – it is the sole competence of member states.” According to the petition’s author, abolishing PIT and eliminating the specified benefits would not only be financially neutral but also administratively simpler and more rational from a systemic perspective. This proposal arrives as Poland navigates ongoing debates about fiscal policy and social spending.

Fairness and Universality of the Solution – Equality Before the System and Simplification of PIT Tax Rules

The petitioner emphasizes that current social programs only cover selected segments of the population – families with children and pensioners. However, as stated, “abolishing PIT would be a universal solution, benefiting all taxpayers, including pensioners and working parents.” The author notes that such action would make the tax system simpler, more transparent, and more equitable. The current system, he argues, contains numerous deductions and reliefs that distort the actual level of taxation.

The petition also includes a comparison showing the difference between nominal and effective tax rates:

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• 2022: First bracket (income up to PLN 120,000) – 4.13%, Second bracket (above PLN 120,000) – 15.58%;
• 2023: First bracket (income up to PLN 120,000) – 4.50%, Second bracket (above PLN 120,000) – 16.00%.

As stated in the justification, “the effective tax paid by citizens, due to many, also complex deductions and reliefs, is in fact significantly lower than the actual tax brackets”.

Ineffectiveness of Targeted Programs Such as 800 Plus, and the Limited Impact of the 13th and 14th Pensions

The author of the petition points out that the “Family 500+” program, transformed into “800+,” has not achieved its main goal of increasing the birth rate. As written: “The “Family 500+,” now “800+,” program has not led to an increase in the birth rate, which was one of its main objectives – it is in fact a social program without income thresholds, which conflicts with the definition of social support from the state budget.”

Regarding pension benefits, the petition states unequivocally: “The 13th and 14th pensions have effectively become a permanent supplement, burdening the budget, with a limited impact on improving the material situation of some pensioners – the universal effect is the tax-free allowance in PIT at PLN 30,000.” The author believes that these funds could be better used by introducing a permanent solution in the form of abolishing PIT, which would provide real relief to all citizens.

Benefits for Citizens and the State – Higher Net Income and Reduced Bureaucracy

The justification extensively discusses the benefits of abolishing PIT. It indicates that the solution would provide:

• higher net income for all PIT taxpayers,
• simplification of the tax system,
• reduced bureaucracy and administrative costs,
• increased transparency of public finances,
• strengthened financial independence of citizens.

The document specifically states: “Higher net income for all citizens with income subject to PIT, regardless of family situation. Simplification of the tax system – no annual PIT settlements, reliefs, and complex forms. Reduced bureaucracy and administrative costs. Increased transparency of public finances. Strengthened financial independence of citizens – they would have a greater say in how their funds are spent.” According to the petitioner, such a solution would promote economic development and increase public trust in state institutions.

Recommendations Regarding Local Governments – Compensatory Mechanisms and Participation in VAT and CIT Taxes

The petition places particular emphasis on recommendations for securing the revenues of local government units after the abolition of PIT. The author writes: “To avoid a loss of revenue for local governments, the petitioner recommends introducing a compensatory mechanism in the amount corresponding to the lost PIT revenues, implemented by increasing the share of local governments in VAT and CIT taxes in several combined or optional variants”. The proposed mechanisms included:

• Transferring a portion of VAT revenues to local governments “Mechanism: increasing the share of local governments in the value-added tax (VAT) from the current ~46% to, for example, 50–55%. Justification: VAT is a consumption tax – it is a simple mechanism and does not require the creation of new taxes.”
• A fixed share of local governments in CIT “Mechanism: local governments receive a certain percentage of revenues from corporate income tax (CIT), e.g., 10–15%. Justification: a stable inflow of funds, which partially compensates for the lost PIT, in large cities with developed business activity, revenues from CIT may be noticeable for municipal budgets.”

The petition also proposes the creation of a “compensatory fund from the central budget”, which would provide an annual compensation to local governments in the amount corresponding to the lost PIT revenues. The author notes that “combining several sources – e.g., 50% from VAT + 10% from CIT + the remaining part from the central budget – means that the compensation is diversified and less sensitive to economic fluctuations.” The petition also proposes “annual indexation of compensation proportional to GDP growth or inflation”, which is intended to ensure the stability of local governments in the long term.

Final Conclusions – Neutrality for the Budget and System Stability

In the concluding part of the petition, the author presents the key points of his proposal:

1. Abolishing PIT in exchange for eliminating the 800+, 13th, and 14th pension programs is a solution neutral for the state budget, more equitable, and beneficial for all citizens.
2. The solution significantly simplifies the tax system for citizens by simultaneously eliminating numerous complex tax deductions and reliefs, often unclear and requiring detailed interpretation by tax authorities.
3. Introducing appropriate compensation for local governments guarantees their financial stability.
4. The solution eliminates the basic problem of PIT, related to the lack of indexation of tax brackets over longer periods of time2, which effectively becomes a regular hidden tax increase.
5. The solution responds to (also electoral) postulates of increasing the tax-free allowance to PLN 60,000 in a tense budgetary situation, a large deficit, and significant defense spending.