PIT after the new. Czerwińska presents the details of the tax revolution

– It's a fight with junk food contracts, even if it sounds a little pompous. A contract of employment gives dignity. Young people do not think about retirement and we want to motivate them, "said Finance Minister Teresa Czerwińska.

On Monday, the minister presented the assumptions for the PIT project for young people, which is part of the so-called Kaczyński's Five. The zero tax will be paid by people under 26 years old. The condition is, however, a full-time job. This means that a person with a work contract or an agency agreement will have to pay the entire tax.

Minister Czerwińska also introduced a limit on the amount of income. The reduction will be limited to 42,764 zlotys per year. The maximum amount is therefore PLN 3563.67 per month. In such a recent year, a taxpayer will save 2986 taxes.

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The amendments will come into effect on October 1, 2019. However, for the current year, the money will only be given to young people when they settle with PIT. In the following years, fewer tax advances will be collected, which means that the salary will simply increase.

However, this is only the beginning of a small revolution prepared by the Finance Ministry. Teresa Czerwińska from 2020 introduces a third additional tax threshold. It will apply to taxpayers whose income does not exceed 42,764 zlotys. For them, the tax will fall from 18 to 17%. This is also the effect of the so-called Kaczyński's Five.

The minister, however, has streamlined it. The better-off will still pay 18% and the richest 32%. – This solution means that the first income and the average earnings will win the most – explained Deputy Minister of Finance, Świtała.

However, not only the amount of tax, but also the tax deductible costs should change. These will increase, which means that taxpayers will pay less. Full-time employees, instead of 1335 PLN, will now be able to deduct 1335 PLN and 3 000 PLN from the tax base. In the case of commuters, this equates to PLN 3 600 for a job.

– This is a double increase. They have not been indexed since 2008. These changes will take effect from 2020 – said Czerwińska.

How much will you save by doing this? A person with a minimum salary, currently 2,250 zlotys, will pay 472 zlotys less per year to the tax office. In turn, a person who earns 4765 PLN (average salary) will earn PLN 696 per year. The amendments come into force on January 1, 2020.

– This is the beginning of the reduction of the tax wedge. I hope that it will also decrease in the years to come, after all the electoral processes – says Teresa Czerwińska.

As she added, the Ministry of Finance, under her direction, wants to make further changes in stages and do so by "adapting to the possibilities". Czerwińska pointed out that the changes affect people in full-time employment. He wants as many people as possible to work on this type of contract.

Surprisingly, the changes, while beneficial for the poor, have so far been discussed in the Kaczyński Five PiS reports on all Poles. The minister, questioned about the change, said she was busy calibrating the previous proposals.

– Prime Minister Morawiecki talked about some strategic assumptions, I calibrated the regulation – she said.

The cost of the changes of the IRPP is between 5.4 and 5.5 billion zlotys, and the lower PPI is 1.3 billion per year.