Is Finance Ministry Too Optimistic About Next Year's Tax Reform?

(From Polish News Bulletin)

The 2009 budget plan assumes the personal income tax (PIT) revenue growth by ZL1.2bn in comparison with the projected 2008 income. A thorough analysis of the project leads to the conclusion though that the PIT revenue will be higher not by ZL1bn but by more than ZL9bn. (...)

According to Finance Ministry, the 2009 PIT revenue will total ZL40.2bn. In 2008 the state budget will be most likely fuelled with ZL39.2bn collected from PIT, which is almost ZL9bn more than the 2008 budget plan assumed. It means that implementation of pro-family tax allowance and raising income tax threshold didn't affect the state budget. It shouldn't come as a surprise given that the allowance was projected to cost ZL7bn, but taxpayers deducted only ZL5.4bn. Besides, the total revenue from PIT was higher by almost ZL4bn than the budget plans.

As a result, the final calculations on the 2007 PIT revenue (the allowance accounting results were included into the 2008 budget) sparked over-optimism at the Finance Ministry, which had an impact on the estimated tax revenue in 2009. Finance Ministry has …