Polish Economists Reject Corporate Tax Hike to Offset AI's Fiscal Impact

Economists taking part in a Rzeczpospolita panel almost unanimously rejected the World Bank's proposal to plug the budget gap created by the growth of artificial intelligence by raising the corporate income tax (CIT). According to most participants, such a move would hurt investment without solving the real problem, since profits from AI companies largely flow abroad anyway.

What the World Bank Report Says

The starting point for the whole debate is the World Bank report "Navigating the Age of AI: Implications for Poland's Economy," which previously warned that the growing automation of cognitive work by AI systems would gradually erode state budget revenue from personal income tax and social security contributions. Under a realistic scenario through 2035, the institution estimates a loss of PIT revenue of 0.2 percentage points of GDP and of ZUS contributions of 0.6 percentage points of GDP. The greatest fiscal pressure is expected to emerge only in 2030-2035, since AI's productivity effects are expected to remain limited through 2028.

The mechanism the World Bank warns about involves a shift of economic value from labor to capital. As AI replaces white-collar workers, traditional sources of budget revenue, wage tax and social contributions, shrink, while profits accrue to companies and their owners. The bank proposes compensating for this by raising the effective CIT rate by 2 percentage points, from the current 19 to 21 percent, which, combined with tighter enforcement, would bring in an additional 0.5-0.6 percent of GDP per year.

Economists Say No

The Rzeczpospolita economists' panel, a recurring survey of leading Polish market analysts, responded coolly to the proposal. Kamil Sobolewski of Pracodawcy RP (Employers of Poland) argued that raising CIT erodes the tax base and hurts economic activity. Łukasz Kozłowski of the Federation of Polish Entrepreneurs (FPP) contended that CIT is inherently an inefficient source of budget revenue, and that raising it is especially damaging to economic growth.

Raising CIT erodes the tax base and negatively affects economic activity - Kamil Sobolewski, Pracodawcy RP

Karol Pogorzelski of Bank Pekao pointed to a flaw in the underlying assumption that a CIT hike in Poland would effectively tax AI-related profits. In his view, companies developing artificial intelligence will keep booking profits abroad regardless, so a domestic corporate tax increase would change little in practice. Marcin Luziński of Erste Bank Polska added that a higher CIT raises the risk of scaring off investment and innovation at exactly the moment the economy needs them most.

Why This Is a Problem for Poland

Commentators point to an additional problem: the structure of Poland's AI market. No leading large language model developers operate in the country, nor is significant data center infrastructure being built there, so the tax base directly tied to AI development is forming mainly in the United States and other tech hubs. That means even effective CIT enforcement in Poland might not reach the source of the problem, the global tech giants profiting from the automation of cognitive work worldwide, including in Poland.

The World Bank notes that a simulated effective CIT rate of 21 percent would still remain below the OECD average of 24 percent, and that the additional revenue could be used to reduce public debt without slowing economic growth. The panel's economists don't dismiss that argument entirely, but stress that raising the rate alone, without changing the tax structure, would accomplish little.

Alternatives to a CIT Hike

Rather than reaching for a higher CIT, the panel's economists recommend first pursuing reforms on the spending side of the budget, and only afterward tax changes focused on consumption taxes such as VAT and excise duty, as well as property taxes, which currently play a marginal role in Poland's revenue structure. Such a direction would distort investment incentives less than a hike in corporate income tax.

For Polish entrepreneurs and professionals planning their careers, the discussion has practical relevance, since it concerns not an abstract scenario but a concrete time window. The World Bank points to 2030-2035 as the period when pressure on the budget could materialize, giving the government several years to prepare changes to the tax system before the drop in PIT and ZUS revenue becomes noticeable.

The dispute over CIT is part of a broader debate already underway in Poland about AI's impact on the labor market and public finances, including the World Bank's earlier estimates of a potential 1 percent of GDP hit to the budget. What's new in this round of the discussion is a concrete proposed solution, raising CIT, and a clear, critical response from economists, who argue that a simple rate change cannot substitute for a deeper reform of the fiscal system suited to an economy driven by capital and automation rather than human labor.