Reducing the VAT gap – the result of effective government actions

A reduction in the VAT gap is the result of a multi-element plan that has significantly hindered the operation of tax criminals – at every stage of their procedure. Increasingly stringent monitoring and sealing of the system means that the VAT carousel’s operating time is getting shorter, bringing less and less benefits, while funds obtained from criminal activities are becoming increasingly difficult to legalise under the guise of honest activity.

In 2015, the VAT gap was 24.1%, while in 2021 it was 4.3%. This is a significant decrease, which is due to the effective policy of implementing sealing tools as well as the actions of the National Revenue Administration.

Poland is consistently closing the gaps previously exploited by criminals

The Prime Minister pointed out that, thanks to the modernisation of the tax administration, the revenues of the Polish state are stable, and thus can still be allocated to social programmes and investments, especially now that the world is struggling with inflation caused by events like Russian aggression against Ukraine.

Since 2017, systemic solutions have emerged, including the split payment mechanism, the VAT taxpayer list and electronic reporting. These have begun to bring lasting effects. There are also other e-administration services, such as online cash registers, which are cash registers in the form of software or an e-receipt.

The method of VAT settlement has also been simplified. The changes introduced have reduced the number of information-related obligations for those who pay this tax. In addition, from January 1, 2022, Polish entrepreneurs can use the National e-Invoice System (KSeF). This is the next stage of implementing innovative e-services in administration, facilitating settlements between companies and ensuring that their settlements are secure.

An ambitious budget for 2023

We are consulting with the Polish people regarding the suitability of the draft budget law for 2023, adopted by the Council of Ministers. The government has consistently increased revenues by effectively filling gaps in public finances, taking measures such as closing the VAT gap. This enables us to implement many programs addressed to the needs of the Polish people.

In the 2023 budget, the necessary funds have been secured for the continuation of the existing priority actions, as well as for the implementation of new ones including:

• social programmes,
• valorisation of pensions and the 13th pension,
• defence measures
• health care
• road construction and repairs.

Russian aggression against Ukraine, rising raw materials prices as well as the COVID-19 pandemic are having a negative impact on the state of the economy in many countries around the world. In this difficult time, the Government is supporting the Polish people by cutting taxes or the implementing its Anti-Inflation Shield. Despite this worldwide crisis, the Polish economy is in a stable condition. We anticipate that, in 2023, U.S. state budget revenues will amount to approx. PLN 604.4 billion, an increase of almost 110% compared to 2015.