Tax changes will boost Polish 2026 budget by over $5 billion, says ministry

WARSAW (Reuters) -Poland is planning tax changes and tightening the tax system which could result in a gain of approximately 19 billion zlotys ($5.22 billion) for the state budget in 2026, the Ministry of Finance said.

This is part of Poland’s response to the European Union’s excessive deficit procedure, which the country has been subject to since July 2024.

While the EU has allowed member states to exclude increased defence spending – up to 1.5% of GDP – from deficit calculations due to the war in Ukraine, Poland is still required to report progress on fiscal consolidation every six months.

The Ministry’s newly adopted plan outlines a series of legislative and administrative actions designed to strengthen the tax system and improve compliance.

“The cumulative financial impact of the actions outlined in the document will amount to approximately 18.7 billion zlotys in 2026,” the Ministry of Finance said in a document published on Tuesday evening.

One of the most impactful proposals is an increase in corporate income tax for banks and selected financial institutions, which is projected to bring in 6.6 billion zlotys.

The government also plans to expand the toll road network, raise excise taxes on alcohol and gambling winnings, and introduce a new “sugar fee” targeting beverage and supplement producers. 

These steps are expected to contribute several billion zlotys to the budget.

Efforts to combat the informal economy include measures to reduce undeclared employment in the construction sector and improve the efficiency of tax offices. 

The ministry also intends to deploy digital tools to curb tax fraud and abuse, with electronic systems playing a key role in enforcement.

In 2026, the budget deficit is planned at almost 272 billion zlotys.

($1 = 3.6365 zlotys)

(Reporting by Pawel Florkiewicz; Editing by Chizu Nomiyama )