Biznes Fakty
The state treasury is in dire straits. A massive deficit
The state budget deficit for the first half of the year was reported to be PLN 119.7 billion, accounting for 41.5 percent of the annual target, as stated by the Ministry of Finance.
By the end of June 2025, budget revenues reached slightly over PLN 264.2 billion, representing 41.8% of the total annual plan, according to an announcement made by the Ministry of Finance on Tuesday. The Ministry pointed out that the execution of this year’s budget is being influenced by the reform in local government financing.
„In similar conditions, meaning without the reform of local government unit shares, state budget revenues for the January-June timeframe would have been PLN 335.5 billion, which is PLN 71.2 billion more, and would have exceeded the previous year’s figures for the same period by PLN 31.6 billion, marking a 10.4% increase year-on-year. This indicates that the year-on-year decrease in revenues is solely due to a different allocation of PIT and CIT revenues between the state budget and local government units,” the Ministry of Finance elaborated.
Tax revenues
The ministry indicated that tax revenues for the state budget totaled PLN 233.5 billion. This figure is approximately PLN 38.9 billion, or 14.3%, lower than during the same timeframe in 2024.
As per the Ministry of Finance’s data, VAT revenues reached PLN 161 billion, which is roughly PLN 17.8 billion, or 12.4 percent, higher than the January-June 2024 results. Excise tax revenues were recorded at PLN 43 billion, showing an increase of about PLN 1 billion (2.5 percent) compared to the first half of 2024.
Personal income tax (PIT) revenues amounted to PLN 17.8 billion, which is around PLN 58.3 billion less than the January-June 2024 period. The Ministry of Finance highlighted that under comparable circumstances, without the local government revenue reform, state budget revenues from PIT would have reached approximately PLN 47.1 billion, reflecting a 16.4% increase from the previous year. Meanwhile, corporate income tax (CIT) revenues totaled PLN 36.3 billion, approximately PLN 0.7 billion (1.9%) lower than last year. According to the Ministry, without the local government revenue reform, state budget revenues from CIT would have been about PLN 40 billion, or 8.1% higher.
Budget expenditures
After the first half of this year, state budget expenditures totaled nearly PLN 383.95 billion, or 41.7% of the total planned for the year. This represents an increase of PLN 10.2 billion, or 2.7%, compared to the same period in 2024.
As of the end of June 2025, the largest expenditures were observed in the Social Insurance Institution (PLN 83.2 billion, or 42.1% of the plan), national defense (PLN 44.3 billion, or 35.8% of the plan), and general subsidies for local government units (PLN 28.3 billion, or 56.1% of the plan). Additionally, PLN 26.1 billion (34.6%) was allocated for servicing the State Treasury debt.
The state budget deficit for the first six months was nearly PLN 119.7 billion, or 41.5% of the total amount projected for the year. The anticipated budget deficit for the entire year is expected to reach PLN 288.77 billion.
