An extensive tax system and a high volume of regulations are among the most frequently cited barriers to doing business in Poland. At the same time, taxes—including excise duties—remain one of the most important sources of state budget revenue. Nearly half of Poles believe that the government supports foreign companies more than businesses with Polish capital, while 64% point to tax system simplification as the change that would most improve conditions for entrepreneurs, according to the report “The State vs. Business.”
“Among OECD countries, Poland currently has one of the most complex and least efficient tax systems, and within the European Union we rank near the bottom in terms of economic freedom. Even within the EU—often criticized as overregulated—we lead in the scale of excessive and complicated regulations. That is why it is necessary to accelerate the planned changes in 2026 and significantly reduce both the number of regulations and the complexity of the tax system,” said Andrzej Sadowski, President of the Adam Smith Centre, in an interview with Newseria.
According to Grant Thornton’s “Legal Barometer 2025,” the number of new legal regulations in Poland has been steadily increasing since the beginning of the economic transition. Between 1989 and 2016, the volume of newly enacted primary legislation grew almost every year, reaching a record in 2016 with over 35,000 pages of new laws. Although the pace slowed between 2017 and 2020, it has increased again in recent years.
The scale of legislative change remains so large that tracking all new regulations is practically impossible for both citizens and businesses. Grant Thornton estimates that in 2024, anyone attempting to stay up to date with all legal changes would have needed to read 14,158 pages of new legislation.
In the International Tax Competitiveness Index 2025 compiled by the U.S.-based Tax Foundation, Poland ranked in the lower tier, placing 35th out of 38 OECD countries, down from 31st the previous year. This indicates that Poland’s tax system is less competitive than those of most developed economies.
“The best way to simplify the system is not through additional digital tools, but by drastically reducing the number of tax regulations. In other EU countries, the same directives—such as those concerning VAT—require far fewer implementing provisions than in Poland. We can draw on proven solutions from other European countries that operate under the same EU framework but with more efficient systems,” Sadowski added.
The complexity of the tax system is consistently identified as a major issue by both entrepreneurs and the general public. According to the “State vs. Business” report prepared by Wprost in cooperation with the Warsaw School of Economics (SGH), the Think About the Future Foundation, and SW Research, 64% of respondents believe that simplifying the tax system would most significantly improve the business environment.
“What is missing in Polish legislation is consistency. Too often, lawmakers act on an ad hoc basis—responding to problems as they arise without a comprehensive strategy. What we need is a coherent approach that delivers simple, transparent, and fair taxation,” said Dariusz Kacprzak, President of the Mazovian Local Government Community. “On behalf of entrepreneurs, I appeal for taxes, excise duties, and the entire legal framework to be simple and clear.”
Excise duty remains one of the most important indirect taxes in Poland’s fiscal system. According to the Ministry of Finance, state budget revenues from excise tax amounted to approximately PLN 92.5 billion in 2025, about PLN 2.2 billion more than the year before. The tax applies to products such as fuels, alcohol, and tobacco, and its level affects not only public finances but also consumer prices and behavior.
“First, the list of products subject to excise duty should be reduced. Second, there should be a uniform excise rate instead of differentiating between products with higher and lower rates. If excise taxes are too high, consumers turn to the grey market. If they are set at an acceptable level, people buy products legally, and the tax effectively contributes to the state budget,” Kacprzak explained during the debate “Financial Freedom of the Younger Generation: The Role of Tax Policy in Securing the Future.”
Students attending the debate also raised concerns about the quality of Polish legislation. One participant pointed to new regulations introduced in autumn that increased excise duties on e-cigarettes by several dozen złoty. In his view, the changes failed to solve the problem and instead shifted trade into the grey market.
“I understand the authorities’ intention to protect young people from addiction. However, the real challenge today is enforcing existing laws rather than introducing new ones. These products are still available, but instead of being sold in official stores, they are increasingly purchased on Asian e-commerce platforms,” the student noted.
This view was addressed by Weronika Smarduch, a member of parliament from the Civic Coalition. She emphasized that two scenarios had been considered during the legislative process: a total ban on e-cigarette sales or a significant increase in fiscal burdens. Ultimately, the latter option was chosen.
“It may be worth revisiting this issue in the future to assess whether the adopted regulations have delivered the expected results,” she said.
Another important aspect of the tax system is the taxation of international technology corporations. Across the European Union and within the OECD framework, efforts are underway to develop solutions ensuring more equitable taxation of global digital companies operating across multiple markets. In Poland, nearly half of respondents in the “State vs. Business” survey believe that the government provides greater support to foreign companies than to domestic businesses.
“The issue with introducing taxes on big tech is not the lack of legislative capability. The real question arises at the final stage of the process—whether the president will sign such a law,” noted Krzysztof Kwiatkowski, Polish senator from the Civic Coalition and former head of the Supreme Audit Office (NIK).
The tax and regulatory environment is also a key factor influencing corporate investment decisions. According to the Polish Economic Institute’s report “Investment Activity of Polish Companies – Scale and Barriers,” Poland’s investment rate remains below the EU average. In 2024, it stood at 16.9% of GDP, compared with the EU average of 21.2%.
In recent months, Poland has begun work on deregulation packages aimed at reducing administrative barriers and simplifying procedures for businesses.
“It is impossible to effectively deregulate major areas without creating good laws in the first place. Every legislative change must be well prepared; otherwise, we risk producing flawed regulations that will later require further deregulation. Improvements such as streamlining and shortening investment processes require comprehensive legislation, which must be properly designed from the outset,” said Weronika Smarduch.
Some deregulation measures are already being introduced gradually, covering both statutory provisions and secondary legislation, as well as simplifying administrative procedures.
“We have around 200 changes included in the Deregulation Package 1.0. Some of these are changes that citizens will encounter directly, for example through simplified administrative or business procedures. Others may go unnoticed—for instance, changes affecting financial market investors. However, this does not relieve policymakers of the responsibility to continue introducing solutions that incrementally improve life for both citizens and entrepreneurs,” Kwiatkowski added.
One frequently cited example of successful deregulation is the 1988 Economic Activity Act, known as the Wilczek Act, which introduced a high degree of freedom for conducting business. However, some of its provisions would not be compatible with today’s legal framework, particularly due to EU rules prohibiting restrictions on foreign companies.
“Instead of navigating thousands of pages of regulations, it was a principle-based law. Anything that did not fit within those principles was addressed in transitional provisions that clearly indicated which rules would lose their force. Searching for individual regulations within a vast sea of legislation is a task for generations, which explains the limited effectiveness of deregulation efforts so far,” concluded Andrzej Sadowski.
