Poland’s Proposed Tax Reform and Social Benefit Overhaul

A proposal currently under consideration in the Polish Sejm suggests a significant overhaul of the national social benefit system, which would involve abolishing the Personal Income Tax (PIT) for all citizens in exchange for the termination of several popular social programs.

The petition proposes replacing the current system of targeted benefits with a substantial increase in the tax-free allowance, raising it to 60,000 Polish zloty (PLN) for all taxpayers. To fund this tax relief, the proposal calls for the end of the 800+ child benefit program and the abolition of additional pensions, specifically the 13th and 14th pension payments.

Proposed Tax Reforms and Benefit Cuts

The core of the petition focuses on shifting the government’s approach from direct social transfers to broad tax relief. Under the proposed plan, the 800+ child benefit program would be discontinued. The 13th and 14th pension payments, which provide supplemental income to seniors, would be eliminated after 2026.

In return for these cuts, the proposal seeks to implement a new tax-free threshold of 60,000 PLN. This move is intended to reduce the overall tax burden on the general population by eliminating the PIT obligation for a larger segment of the workforce.

This proposal is part of a broader debate regarding the sustainability and structure of Poland’s social welfare state, weighing the benefits of direct cash transfers against the economic impact of lower personal income taxes.

Existing Tax Relief for Families

While the petition for a general PIT abolition is under discussion, other specific tax reforms have already been enacted. President Karol Nawrocki signed a law in October 2025 introducing zero personal income tax for parents raising at least two children.

This specific reform removes the income tax obligation for families earning up to 140,000 zloty per year. The tax break is available to all parents with parental responsibility, including foster parents and legal guardians.

According to calculations from the presidency, the average Polish family is expected to be better off by approximately 1,000 zloty per month due to this tax break. However, the financial impact of this law will not be visible until the 2026 tax return, which is to be filed in 2027.

Context of the ‘Polish Deal’ and Previous Reforms

The current proposals follow a series of significant tax changes introduced under the ‘Polish Deal’ reform program in 2022. These previous changes included increasing the tax-free amount to 30,000 PLN and reducing the tax rate for the first tax threshold from 17% to 12%.

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Other adjustments under the Polish Deal included lowering lump-sum tax rates for registered income. Professionals in fields such as engineering, architecture, and medicine saw their rates move to 14%, while certain IT services were reduced to a 12% rate.

The government also implemented administrative changes, such as extending the deadline for filing PIT-28 forms to the end of April and allowing spouses to opt for joint tax reconciliation in the same year they marry.

Additional Proposed Social Changes

Beyond the tax and pension debates, other proposed changes to the social benefit landscape have emerged. Reports indicate a proposal for a 200,000 Plus payment for the birth of a child, which would potentially take effect on January 1, 2027.

there have been calls for retroactive 800+ payments to be extended to seniors as part of the legal challenges and debates surrounding the social benefit system’s overhaul.

The proposed shift toward a 60,000 PLN tax-free allowance and the potential removal of the 800+ and supplemental pension programs remains a subject of legislative scrutiny within the Sejm as Poland evaluates its long-term fiscal and social strategy.