Poland’s richest voivodship, Mazowieckie, which includes the capital Warsaw, is being pushed to the verge of bankruptcy by its requirement to pay a “solidarity tax,” widely referred to as “Janosikowe” (roughly translated as “Robin Hood” tax), Marek Miesztalski, the voivodship’s treasurer, told Gazeta Wyborcza.
|Outside of Warsaw, Mazowieckie is a poor, mostly rural region|
Poland’s 16 voivodships are its largest local-government entities, and are akin to provinces. The “Robin Hood” tax is so-named because it is a tax that transfers money directly from rich regions to poor ones.
Out of Mazowieckie’s budget of zł.3 billion for 2013, it must pay zł.660 million in the tax. Such huge chunks being taken out of the budget make current spending nearly impossible, officials say.
“To pay the monthly rates back to Poland’s budget in June, July and August we had to take out loans,” explained Mr Miesztalski. “We can’t take another one. In this case we have to decide whether to pay the bills or the solidarity tax,” he added.
The Mazowieckie authorities asked the Finance Ministry to remit the remaining four payments of 2013. While the ministry hadn’t officially responded as of press time, it sent a letter to Gazeta Wyborcza saying that “such remittances are impossible in the current state of the Polish budget and its deficit.”
Killing the goose
The tax is paid by local government units at all administrative levels. The tax is calculated by comparing income per capita for each administrative unit with the national average. Regions with income above the national average are subject to hefty levies.
The benchmark used to determine which regions have to pay this year were established two years ago, when Poland enjoyed much higher GDP growth. Mazowieckie is in fact the only voivodship this year that is a net payer of the levy. For every two złoty it receives in tax, Mazowieckie transfers one złoty back to the state budget. That leaves very little for investment. Last year Mazowieckie’s expenditures per capita were the lowest out of all of Poland’s voivodships.
The region’s officials have long complained that the fee, introduced in 2003, places too great a strain on Mazowieckie, which has already been struggling amid the economic slowdown. In the first half of 2013, Mazowieckie received zł.200 million less from corporate income tax than in the corresponding period of 2012. The region’s government announced it will officially suspend payment of the tax on September 16.