Polski Ład z perspektywy samodzielności finansowej jednostek samorządu terytorialnego
Polish Deal from the perspective of financial independence of local government units

Author(s): Sławomira Kańduła
Subject(s): Politics, Economy, National Economy, Business Economy / Management, Micro-Economics, Public Administration, Economic policy, Government/Political systems, Public Finances, Fiscal Politics / Budgeting, Accounting - Business Administration
Published by: Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
Keywords: Polski Ład;jednostki samorządu terytorialnego;udział w podatku dochodowym;subwencja;finansowanie gmin;
Summary/Abstract: Purpose: The purpose of this chapter is to assess instruments that compensate local government units (LGUs) for the loss of income from shares in personal income tax and shares in corporate tax in connection with changes in these taxes as a result of Polish Deal program. The assessment was made from the point of view of the financial independence of local government units. Design/methodology/approach: The paper begins with outlining the changes in state income taxes in Poland. The next section concerns the method of assessing the “foreign” income of LGUin the context of financial independence. Then the instruments that compensate local government units for the loss in tax revenues were discussed and their assessment was made from the point of view of the financial independence of LGU. Findings: The following consequences of Polish Deal for LGU can be identified: 1) decrease in tax revenues, 2) deterioration of the structure of budget revenues (increase in the share of “foreign” revenues), 3) establishment of “rescue” instruments in the form of a subsidy development part and changes in the allocation of revenues from shares in state taxes. The financial consequences of the changes brought about by Polish Deal vary depending on the level of local government. The municipalities, including cities with poviat status, will feel them most acutely, as they have the highest share in personal income tax. The mechanism of dividing the development part of subsidy favors some local government units because it relates to the population size and not the actual loss of income from shares in state taxes. Instruments compensating the loss of income of LGU in connection with Polish Deal limit the financial independence of LGU and deepen the lack of transparency in the redistribution of income in the public finance sector in Poland.

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