Poznań loses PLN 600 mln a year on tax changes

The changes in the Polish Deal reducing PIT from 17 to 12 percent and inflation several times higher than predicted a year ago have an impact on city finances. They limit their revenues, coming mostly from income tax, and increase expenditures due to accelerating investment costs. The situation is not improved by the war in Ukraine and the influx of refugees as well as pandemics, although they are not the most significant problems for local budgets.

"The biggest impact on the state of city finances is the tax changes that the government is making, not the pandemic at all, not even the refugee problem. The pandemic in the financial sense can be said to be over, in the medical sense it is at the stage of dying out, at least for now," Piotr Husejko, the treasurer of the city of Poznań, said.

"The refugee problem will probably also become smaller in some perspective. On the other hand, changes in the tax system, which will be in force every year in the future, are not a temporary event, they determine the financial situation of the city to the greatest extent. These tax changes introduce a great deal of financial uncertainty into all local governments. There have never been so many changes in such a short period of time," he added.

(Newseria)