Poland Kicks Into Effect New Law That Will Allow 2 Million Young Workers To Avoid Paying Income Tax

A Polish flag adorned with a black strip flies high above mourners waiting in a snaking line to pay their last respects at the coffins of late Polish President Lech Kaczynski and his wife Maria that were lying in state in the Presidential Palace on April 15, 2010 in Warsaw, Poland.
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The Polish government has passed a new law that will go into effect this week and effectively scrap income taxes for around 2 million young people in order to prevent them from leaving the country to find work elsewhere, reported CNN.

After Poland joined the European Union, their citizens were allowed to travel, live, and work anywhere in the fellow Union countries, leading to enormous waves of emigration that have drained the country’s workforce. As young people have been able to find better-paying work abroad, they have had little incentive to stay in their native country.

The new law hopes to prevent young workers from looking for work outside of Poland by making them exempt from paying taxes on their salaries. The benefit will apply to workers under the age of 26 who make less than 85,528 Polish zloty ($22,547) a year, allowing around 2 million people to avoid paying the 18 percent income tax starting August 1. The average annual income for Poles is around 60,000 zloty ($15,700) a year.

Prime Minister Mateusz Morawiecki hopes that the new allowance will permit young Poles to find opportunities in their own country that match those they find in the West.

“This must end, young people must stay in Poland,” Morawiecki added after comparing the loss of 1.7 million people to emigration as if the entire city of Warsaw had left.

Barbara Jancewicz, who runs the Economics of Migration Research Unit at the Center of Migration Research in Warsaw, commented that the loss of young workers has taken an enormous toll on Poland’s economy.

“In the past three (or) four years we started seeing worker shortages and [realized] that we need those people back.”

While the government’s incentive is generous, not everyone is in agreement that the allowance will be an effective measure to encourage people to stay and work in Poland.

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CNN spoke with 22-year-old Kinga Kitowska, who left Poland to study in London and subsequently work there. Kitowska told the news outlet that the allowance offered by the Polish government won’t make her move back home.

“To make young people stay in the country, I don’t think that’s the way to go. It’s about building opportunities and opening sectors which are attractive for young people at the moment.”

Most of Poland’s emigrants live and work in the U.K., where they experience much higher salaries. Despite no longer needing to pay 18 percent income taxes, the money that Poles will take home working in their home country will still not compare to what they can take home in the U.K.

Another issue pointed out with the incentive is that it will stop when workers turn 26, causing them to again look for work outside of Poland and perpetuate the same cycle.