business transactions
5. Proposed changes
Changes in the planning of budget revenue in Poland can be very di-verse in nature due to its subject and depth. Presented briefly below are possible future changes. They cover both the rationale of looking at the problem under discussion, as well as organizational and legisla-tive aspects of its solution:
2 The Act of the 11th of March 2004 on the Tax on Goods and Services (in Polish) (DzU 2011 No. 177, Item 1054, as amended).
1. The legislatively prognostic nature of budget revenue planning and giving priority to rationalization of expenditure in the re-form of public finances cannot be treated mechanically. Plan-ning of budget revenue must therefore be realistic and active, rather than passive and over-optimistic. From the point of view of public finance management, revenue planning is as important as the rationalization of expenditure and the correct way in which revenue is planned conditions the logic and success of this rationalization. Increasing the importance of budget reve-nue planning in financial policy is therefore a sine qua non con-dition of its success.
2. Legislative conditions must be created for active and realistic planning of budget revenue. Taxes constitute the bulk of this revenue. The aim of this change would therefore be to repair the broadly-defined tax law, which is not an original postulate, since almost all specialists agree with it. It is also a problem that is very difficult to solve, especially for social and political rea-sons. L. Balcerowicz experienced this when his reform of the tax system and tax law introduced in 19972000 ended unsuc-cessfully. An additional proposal would be original, however, namely the proposal of analyzing the evolution of the system of taxation from the point of view of limiting its performance for the states budget and attempting to create legal ways to remove the main barriers in this regard. Because when analyzing the tax system instituted in Poland, it is obvious that taxes have become part of a social and political game at the expense of their primary fiscal function, which is providing the budget with revenue.
3. Improvement of budget revenue planning requires organiza-tional and conceptual changes in the Ministry of Finance and tax authorities. This, in particular involves the strengthening of analytical work and conceptual and strategic actions. Accurate assessment in this respect and postulates of changes have been frequently presented in the publications by C. Kosikowski [2010, pp. 3032, 334]. They include, but are not limited to: as-suming the principle stating that legal solutions concerning tax burdens are the result of sound economic and social analysis as well as financial ones and take into account the financial situa-tion of the society, especially of households and entrepreneurs
and their significant differentiation; requiring the Ministry of Finance to develop a financial policy program, carrying out permanent and professional analysis and evaluation of public finances and an increased involvement in the shaping of the fi-nancial legislation and changes in its interpretation and applica-tion; supporting the activities of the Minister of Finance on sci-entific advice, coming from his own scisci-entific background and so-called independent experts. It is also a task of the Ministry of Finance and of scientists to develop the concept of minimizing the tax losses connected with the existence of a shadow econ-omy, both in terms of limiting its scope and of indicating the origin of income from undisclosed sources. This latter aspect is particularly important in light of the Constitutional Tribunal judgment on the 18th of July 2013 (Ref. No. SK 18/09), which is critical of the existing rules for determining the amount of this revenue.
4. An increasing number of European Union countries have intro-duced an independent body, responsible for financial policy, in-cluding fiscal policy, often referred to as the Fiscal Council. In some countries it is of a constitutional nature as seen in Hun-gary. Such a body might also have a positive impact in Poland, in terms of improving the correctness of budget revenue plan-ning. It is all the more relevant because it is doubtful that the previous comments submitted to the Ministry of Finance will ever see the implementation stage. In many studies it has been found that this institution shows exceptional resistance to pro-posed changes, or to even hold a discussion about them [Etel, Kosikowski et al., 2000; Rukowski and Zawadzka-Pk, 2010].
Therefore, certain tasks expected from the Minister and the Ministry of Finance must be performed by an independent ex-ternal body. It is all well and good that Poland has made a legis-lative attempt to establish such a body. On the 19th of July 2013, a group of Polish MPs submitted a draft law on the Fiscal Council to the Sejm. It is supposed to be a completely new in-stitution of an advisory and consultative nature whose tasks would include giving opinions about the government’s fiscal policy and its supervision and the prevention of debt accumula-tion, providing reliable macroeconomic forecasts and analyzing
the economic efficiency of public spending and taxes. This ini-tiative should regardless of its future in terms of legislation
at least trigger a scientific and public debate.
Summary
The policy on planning and implementation of public revenue, which is passive and at the same time unrealistic due to over-optimism, is a natural threat to the financial and economic security of the country. It indeed complicates the efforts to reduce the budget deficit and inhibits public debt control, at the same time rendering the rationality of activity-based planning and the imple-mentation of expenditure is questionable, both on an annual basis and within MSFPs. Making this policy active and real is therefore supposed to help optimize the budget revenue optimization and its planning on a realistic level. It must be necessarily linked to the feasibility of implementation of this revenue and also dependent on it. Only then, will it be possible to realistically perform activity-based planning of budgetary expenditure and maintain a proper, comprehensive fiscal policy of the country. It may also turn out that the condition for its success in Poland is the establishment of a Fiscal Council.
References
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Gadomski, W. (2013), What can we do with the hole in the budget? (in Polish), Gazeta Wyborcza, 18 July.
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The Act of the 11th of March 2004 on the Tax on Goods and Services (in Polish) (DzU 2011 No. 177, Item 1054, as amended).
The Act of the 26th of July 2013 amending the Act on Public Finances (in Polish).