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Poland scraps income tax for young adults

The country has eliminated income tax for young people to stop them emigrating elsewhere.

When Poland joined the EU in 2004, their citizens became eligible for the bloc’s ‘freedom of movement’ clause, i.e. the right to live and work in any EU country without restrictions. About 1.7 million Poles took that offer up and moved elsewhere, often because they could earn much higher wages abroad, which in turn gave them and their loved ones access to a better quality of life.

Not everyone is a fan of this mass movement of Polish people. Some citizens of the EU countries don't like lots of immigration - usually because of concerns about competition for jobs or a perceived clash of cultural values or just flat-out xenophobia - and Polish immigrants often arouse particularly hostility. A quarter of Brits, for example, say they don’t want any Polish migrants in the UK, compared to one in ten who say the same of Australians.

Also unhappy is the Polish government, because more emigration means less workers - and particularly skilled workers - remain to do stuff that would benefit Poland and its economy. So the Polish government has come up with a tactic to either lure young people back to Poland or persuade them not to leave in the first place: it’s getting rid of income tax for under-26-year-olds who earn up to 143 percent of the average Polish salary.

At the moment, employees in Poland give the government just under one-third of their wages. Keeping that in their pockets would give them more disposable income and offset the fact that Polish wages are still lower than elsewhere in Europe. But it means foregoing revenue for the government, who uses taxes to fund things like education and health care. And it may cause resentment from older Poles, especially those who paid tax throughout their early twenties.

Read our explainer on: tax.

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Reader Comments

  • Interesting story. I’m planning a business trip to Prato. Hopefully I will find what I need there.