The big search for money to fill the huge hole in the budget

The Ministry of Finance said it was seeking additional "financing for state budget expenditure, in particular increased needs in relation to expenditure on safety and health protection ."

This is how taxes for banks and excise tax on alcohol are to increase

Therefore, the ministry is currently working on a bill that will increase the corporate income tax (CIT) rate for banks while simultaneously reducing the tax on certain financial institutions. The CIT rate for banks is scheduled to increase in 2026 from the current 19 percent to 30 percent. In 2027, it is scheduled to drop to 26 percent, and then permanently reach 23 percent in 2028. The tax rate on certain financial institutions, known as the banking tax, is expected to move in the opposite direction. This tax rate is scheduled to drop by 10 percent in 2027 and by 20 percent (compared to the current year) starting in 2028. The goal of this move is to "stimulate lending." The Ministry of Finance estimates that the changes will increase CIT revenues by approximately PLN 6.5 billion in 2026. Over the next 10 years, they are expected to generate over PLN 20 billion for the budget.

But that's not all. From January 1, 2026, excise tax on ethyl alcohol, beer, wine, fermented beverages, and intermediate products is to increase by 15 percent. Another increase, this time by 10 percent, is planned for 2027. The so-called sugar fee is also to increase: a fixed portion from PLN 0.50/l to PLN 0.70/l, and a variable portion from PLN 0.05 to PLN 0.10 for each gram of sugar above 5 g/100 ml. The caffeine/taurine fee is to increase from PLN 0.10/l to PLN 1/l, with the maximum rate increasing from PLN 1.20/l to PLN 1.80/l. In addition, the obligation to pay this fee will be shifted to the beginning of the supply chain. Estimates of the financial impact of these changes have not yet been released.

There are first protests against tax increases for banks

"The Polish banking sector is already among the most tax-burdened in Europe. Banks operating in Poland are the largest contributors to the state budget's borrowing needs among EU countries, accounting for over 50% of Poland's borrowing needs," the Polish Bank Association (ZBP) comments on the tax changes being prepared by the Ministry of Finance. It notes that in 2024, banks contributed PLN 24.16 billion to the state budget through income tax, bank levy, and dividends to the state treasury (one in four zlotys of corporate income tax came from banks). It adds that the assumptions presented by the Ministry of Finance fail to take into account the decline in interest rates and their negative impact on banks' financial results. "The proposed solution creates a permanent imbalance, or even market asymmetry, which reduces the competitiveness of the banking sector both domestically and internationally," the ZBP notes.

The announcement of additional taxation on banks has hit their stock prices on the Warsaw Stock Exchange. The WIG Banks index (WIG-20) lost over 10 percent at the close of trading on Friday. Banks listed in the WIG-20 also saw significant declines. PKO BP fell by almost 12 percent, Bank Pekao by 11 percent, Alior Bank by over 9 percent, Santander Bank Polska by over 8 percent, and mBank by over 6 percent.

The spirits industry has received the news of the planned increase in excise tax on alcohol above established rates with great concern. "According to the so-called excise roadmap, excise tax on alcoholic beverages was to increase by 5 percent annually until 2027. The announced increases of 15 percent in 2026 and 10 percent in 2027 will deepen the long-term decline in sales of legal spirits and shift consumption towards the grey market," the Association of Polish Spirits Industry Employers states. It also points out that the reason for the long-term decline in sales of legal spirits is the rising prices of spirits caused by annual excise tax increases, rising prices of raw materials, energy, and other production costs. "High inflation, and the resulting rise in food and energy prices, have led to a reduction in spending on legal spirits and a shift of some consumers to the grey market. The excise tax rate on spirits in Poland is already among the highest in Europe," notes the Union of Polish Spirits and Brewers.

The Association of Brewing Industry Employers – Polish Breweries (Związek Pracodawców Przemysłu Brewowskiego – Browary Polskie) is also surprised by the Ministry of Finance's plans. They also point out that the announced increase is a drastic departure from the excise roadmap. They estimate that beer brewing and sales generated PLN 18 billion in state budget revenue in 2024, primarily from VAT, excise, corporate income tax, and personal income tax. The excise tax paid by the industry alone totals PLN 3.58 billion. The Association believes the excise tax increase will deepen the decline in beer sales and will impact breweries, small shops, restaurants, and agriculture.

Bank customers will pay for the tax increase by the Ministry of Finance

"The Ministry of Finance has chosen a poor method for increasing taxation on the financial sector, as evidenced by the banks' valuations on the Warsaw Stock Exchange," says Janusz Jankowiak, chief economist at the Polish Business Roundtable. He believes there's a significant risk that banks will reduce their tax base by increasing expenses classified as tax-deductible costs. Furthermore, differentiated CIT rates across sectors undermine the uniformity of the tax system. Promises of lower tax rates in the coming years are, in light of past experience with periodic tax increases, completely unreliable. And the incentives for lending growth through a reduction in the bank tax are ridiculous. A less harmful solution than a higher CIT would be the previously considered taxation of income from banks' mandatory reserves, Janusz Jankowiak believes. In his opinion, the increase in excise tax on alcoholic and sweetened beverages, traditionally justified by "health prevention," was and is "a sham on springs." "As expected, intensive work is underway to increase tax revenues. However, significant consolidation on the expenditure side is negligible," notes the chief economist at the Polish Business Roundtable. "A presidential veto? It's certainly possible, though it could be problematic, as banks aren't particularly well-regarded. The game will be about keeping the sector's deficit close to this year's, so that it doesn't grow significantly, Janusz Jankowiak tells "Rzeczpospolita."

"The budget is already under significant pressure, and significant additional funding is needed. The Finance Minister is selecting taxpayers who will have little opportunity to protest, citing banks that are not well-liked and sugar and alcohol that are harmful to health," notes Piotr Soroczyński, chief economist of the Polish Chamber of Commerce. He points out, however, that excessive tax increases can eventually lead to a sharp decline in the consumption of taxed products, and consequently, a drop in tax revenues. "We already experienced this years ago," reminds the chief economist of the Polish Chamber of Commerce. He adds that excise and sugar taxes are a double-edged sword for the budget, because after the price of a product subject to a higher excise tax increases, the budget also receives more of the VAT charged on it. "A higher tax imposed on banks will, sooner or later, be passed on to their customers in the form of higher fees for accounts, cards, transfers, or lower interest rates on deposits. This is a common practice," says Piotr Soroczyński.

"The idea of ​​raising corporate income tax (CIT) just for banks from 19% to 30% is absurd. Today, I see a decline in their shares. It's still small, because some believe in Nawrocki's veto," Piotr Kuczyński, chief analyst at Xelion, said on Friday. "You want to build an army? Issue 'arms' bonds and don't kill the Warsaw Stock Exchange," he appealed.

On Friday, the Ministry of Finance announced that it is not currently working on amending the 2025 budget. This is despite the fact that after seven months of this year, revenue levels are very disappointing, amounting to only 49.6% of the plan for the entire year.