Friday, November 26, 2010

Poland's first report on tax expenditures

Yesterday, the Polish Ministry of Finance published its first, comprehensive tax expenditure report, which estimated that various tax privileges across PIT, CIT, VAT, excise and local taxes cost the Polish taxpayer about PLN 60 billion or 4.9% of GDP a year, a staggering sum.

This is a very good report and is worth reading. One can only hope now that the report will not only raise the profile of the public debate on tax expenditures, but also lead to concrete actions aimed at eliminating the most egregious tax expenditures, which fail to meet any economic and social objectives, and are also grossly regressive, benefiting the richest households only. Eliminating tax expenditures would also help mitigate the need for further tax hikes.

I mention the report also because I have contributed to it (on behalf of the World Bank), which the MoF's deputy minister kindly acknowledged in his foreword. I have also helped co-organize an international conference held on Nov 25, which provided the venue for the launch of the report.

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