The evolution of legal regulations in the field of financing local government units in Poland in the years 1990-2024
DOI:
https://doi.org/10.24136/ceref.2026.007Keywords:
local government finances, local government units, stages of financing evolution, legislation, taxes, PolandAbstract
The aim of the study is to present the evolution of the system of financing local government units (LGUs) in the years 1990-2024, in the context of both financial and systemic changes in Polish local governments. The results of the analysis of the development of the Polish model of financing local government units indicate that since 1990 the legislator has repeatedly interfered in the construction of local taxes, shares of personal income tax (PIT) and shares of corporation tax (CIT). The effects of these changes were different for municipalities, districts and provincial authorities. Municipalities were the only ones equipped with their own local taxes to show the relatively highest level of resilience to fiscal changes. Districts remained the most susceptible to the effects of central tax changes. Provincies, on the other hand, functioned in a model depending on the economic cycle and CIT revenues. The 2024 Act is characterised by a moderate level of normative effectiveness. Its key achievements include: a partial increase in the revenue stability of local governments units, a reduction in the direct impact of central tax changes on local government revenues, and the strengthening of redistributive mechanisms. The main limitations, however, include: excessive complexity of calculation algorithms, limited transparency of calculation mechanisms, incomplete implementation of the principle of adequacy of revenues to public tasks, failure to fully strengthen the actual fiscal autonomy of local governments and the lack of a proper valuation of public services. Consequently, the 2024 Act constitutes a transitional solution, requiring further legislative amendments to achieve full compliance with the constitutional standard of financial independence of local government units.
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Legal acts and documents
The Constitution of the Republic of Poland, Dz.U. 1997 No. 78, item 483, as amended.
Sejm, Paper 622, https://orka.sejm.gov.pl/Druki10ka.nsf/0/ 1F1CB0C9E769A731 C1258B8E004BF494/%24File/622.pdf
The Act on Commune Revenues and the Rules of Their Subsidy in 1991, JO L 1991 No. 89, item 518.
The Act on Municipal Revenues, JO L 1993 No. 129, item 600.
The Act on the Income of Local Government Units in 1999 and 2000, JO L 1998 No. 150, item 983; JO L 1994 No. 124, item 607; JO L of 2003 No. 203, item 1966 as amended
Act on the Income of Local Government Units, JO L 2003 No. 203, item 1966 as amended ref. K 13/11
Public Finance Act, JO L 2009 No. 157, item 1240, as amended.
Local Taxes and Fees Act, JO L 1991 No. 9, item 31.
The Act on Local Government, JO L 1990 No. 16, item 95.
Act amending the Personal Income Tax Act and certain other acts, JO L 2021, item 2105.
Act of 1 October 2024 on the income of local government units (JO L 2024, item 1572).
Act of 13 November 2003 on the income of local government units (JO L 2023, No. 203, item 1966, as amended).
Act of 13 November 2003 on the income of local government units (JO L 2023, item 356, as amended).
Act of 14 December 1990 on the income of municipalities and the rules of their subsidy in 1991 (JO L 1990, No. 89, item 518).
Act of 14 October 2021 amending the Act on the Income of Local Government Units and Certain Other Acts, JO L 2021, item 1927.
Agricultural Tax Act of 15 November 1984 (JO L 2020, item 333).
The Act of 23 October 2014 amending the Act on the Income of Local Government Units, JO L 2014, item 1574.
Act of 26 November 1998 on the income of local government units in 1999 and 2000 (JO L 1998 No. 150, item 983).
Act of 8 March 1990 on Municipal Self-Government (JO L 2023, item 40, as amended).
Judgment of the Constitutional Tribunal of 25 July 2006, ref. no. K 30/04.
Judgment of the Constitutional Tribunal of 4 November 2003, ref. no. As of 1/03. JO L 2024, item 1572.
Judgment of the Constitutional Tribunal of 4 March 2014, ref. no. K 13/11, OTK-A 2014, No. 3, item 24.
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