On 16 May 2016 the IMF published a report on Poland following the completion of discussions under Article IV of the IMF’s articles of agreement.
Poland’s economy is expanding rapidly and growth reached 3.6% in 2015. Growth is expected to remain strong in 2016 and to increase to 4% in 2017. External risks have however intensified and a slowdown in the euro area could spill over to Poland. The IMF considers that structural reforms are essential for healthy economic growth and reducing regional disparities.
The IMF notes that the child benefit scheme introduced in April 2016 is to be financed by a sectoral tax on financial institutions together with one-off revenues. There are also plans to reverse the retirement age increase and to increase the personal income tax allowance. The IMF considers that the distortionary tax on financial institutions could mean a decrease in the supply of credit and it should be replaced by a tax on profits and remuneration that would be more friendly to growth. The current VAT rate should be maintained after 2017 and in the medium term the multiple VAT rates could be unified.
The IMF welcomes the efforts by the government to strengthen tax administration but considers that any revenue gains resulting from these reforms will take time to materialize.
