Belka's tax, or taxation on capital gains, has been controversial among Poles for years. Introduced in 2002, by then Finance Minister Mark Belka, it became a pain of people who decided to save money in banks or invest in the financial market. Its goal was to fix the budget hole, but after more than 20 years since its introduction, it inactive burdens the finances of Poles. In the face of rising inflation, low interest rates on investments and an expanding willingness to save, the issue of this taxation becomes even more important. Do Poles have a chance to be relieved, and if so, how can they benefit from the coming changes?
Belka taxation – What is it?
The Belka tax, or more specifically the capital gains tax, includes profits obtained by individuals from bank deposits, bonds, shares, investment funds or another financial instruments. It was introduced in 2002 of 19%, which means that from all amount earned from the investment, we gotta pay this rate. Although initially intended to be only a temporary solution, it shortly became a permanent part of the Polish taxation system.
At present, the Belka taxation is 1 of the main reasons why Poles frequently choose to invest outside the country, where taxes are lower and procedures more investor-friendly. Many say that this strategy is not conducive to austerity, even discourages capital proliferation.
Belka taxation and changes in Polish law
For a long time, politicians have been announcing changes in the issue of the Belka tax. In 2023 Civil Coalition promised to partially destruct this tax, indicating that savings and investments up to PLN 100 1000 could be exempted from this burden. Unfortunately, despite the promises, these changes have not yet been implemented.
In the meantime, a task prepared by Confederation, which provided for exemption from the taxation of Belka for people with savings of up to PLN 100 thousand. Although any Members supported the idea, he was besides criticised. Mainly due to the fact that it afraid only part of the profits from capital, excluding investments in shares or stock funds. Following the vote in the Sejm, the task was rejected as there were no details of the reform.
What changes do politicians make?
After rejecting the Confederacy project, Government of the United Right began to uncover the details of his proposal for amendments to the Belka tax. Although the details are inactive unclear, the announced changes may include exemption from taxation Belka partially saves up to PLN 100 thousand. specified a solution could aid Poles to save more money and stimulate the national economy. On the another hand, a simplification in taxation gross may affect the simplification of funds in the state budget.
However, the expected change is not simple. Experts propose that besides extremist taxation simplification can lead to negative economical impacts, specified as reducing gross to the state budget. On the another hand, maintaining the current level of taxation can lead to further discouragement of Poles to save money in the country and advance investment abroad.
Why are changes in the Belka taxation so important?
The Belka taxation is peculiarly severe in times of advanced inflation, which reduces the real value of savings. In combination with the low interest rates that banks offer on deposits, Poles frequently opt for alternate forms of investment to gain greater profits. Unfortunately, Belka's taxation collects any of these profits, which makes specified investments little profitable.
The advanced taxation on capital gains besides affects investment preferences of Poles. Those who could invest in fiscal bonds or investment funds either quit these options for more risky investments or simply choose deposits that do not give besides much returns. In this context changes in Belki tax could be an incentive to save and invest in the country.
When can we anticipate change?
Although the subject of the Belka taxation is hot, there is not yet a circumstantial date for the proposed amendments. The government is presently examining proposals and wondering how to implement them in a way that will not harm the Polish economy. So far, the key decisions in this case could fall into 2025when it is envisaged to vote on a draft fresh taxation reform.
Alternatives for those seeking relief
Although the changes in the Belka taxation are inactive in the debate phase, those looking for ways to reduce their taxation liabilities may consider investing in another forms of savings, specified as IKZE (Individual Pension Insurance Account) which allows deduction of contributions from the taxation base, or IGZE (Individual Guaranteed Pension Insurance), where part of the profits can be exempt from Belka tax.
The Belka taxation has for years been 1 of the main topics related to saving in Poland. On the 1 hand, it can discourage savings in banks, on the another hand, as a permanent origin of gross for the state budget. The introduction of reductions, which will exempt savings gains from partial taxation to PLN 100 thousand, could be a step towards promoting savings and investment in the country, but these changes besides entail a hazard to the budget.
Continued here:
Saving tax. You're gonna pay to keep the money in the bank.
