World Bank: AI Development Could Cost Poland's Budget 1 Percent of GDP

The World Bank warns that advancing workplace automation driven by artificial intelligence could, within the next decade, strip Poland's budget of personal income tax (PIT) and Poland's social insurance institution (ZUS) contributions worth up to 1 percent of GDP at its peak. A panel of economists convened by Rzeczpospolita, asked to assess the forecast, mostly agreed with the diagnosis, though not with the proposed remedy.

What the report says

World Bank analysts argue that high AI adoption across the economy, while boosting productivity, will simultaneously reshape the labor market enough that the state budget will lose part of the revenue it currently draws from taxing employment. The mechanism is simple: wherever AI replaces workers, the tax base built on wages disappears, replaced by capital gains for the technology's owner, which are taxed far more lightly in Poland.

The World Bank's recommendation amounts to shifting part of the fiscal burden from labor to capital, that is, raising the effective CIT rate by 2 percentage points. According to simulations cited in the report, such a change could bring the budget an additional 0.5-0.6 percent of GDP per year, and a rate of 21 percent would still remain below the OECD average of 24 percent.

Why economists doubt a CIT hike

Even though Rzeczpospolita's panel of economists agrees with the diagnosis of fiscal risk, most of its members reject the proposed solution. Kamil Sobolewski, chief economist at Pracodawcy RP (an employers' organization), sees the rate hike as a mistake in itself, regardless of the AI context.

The CIT rate in Poland should not be raised. Tax increases erode the tax base - Kamil Sobolewski, chief economist at Pracodawcy RP

Łukasz Kozłowski, chief economist at the Federation of Polish Entrepreneurs (Federacja Przedsiębiorców Polskich), points to a different problem: CIT is a relatively inefficient source of budget revenue, and raising it hits economic growth hardest. Kozłowski adds that Poland has no concentration of leading AI companies or data-center infrastructure on its territory, so the tax base tied to AI profits is developing mainly in the United States, not in Poland.

CIT is a relatively inefficient way to generate state budget revenue - Łukasz Kozłowski, chief economist at the Federation of Polish Entrepreneurs

The problem of global tech giants

Karol Pogorzelski, an economist at Bank Pekao, points to an additional difficulty: international AI technology providers can avoid taxation by booking revenue in jurisdictions with the most favorable tax terms. International cooperation aimed at closing loopholes in big tech taxation has so far produced limited results, but Pogorzelski believes it remains necessary if Poland and other EU countries want to genuinely recover some of the lost revenue.

Marcin Luziński of Erste BP points to a risk to investment. In his view, raising CIT at a moment when the economy most needs capital and innovation could push good ideas and companies to relocate abroad instead of growing their operations in Poland.

Raising the CIT rate is more likely to drive good ideas away - Marcin Luziński, economist at Erste BP

What this means for Poland

Behind the dispute over the CIT rate lies a broader problem: Poland's budget relies heavily on taxes on labor, personal income tax (PIT) and contributions to Poland's social insurance institution (ZUS), a structure that took shape when human labor was the main source of added value in the economy. If artificial intelligence really does replace a share of jobs at a pace close to Eurostat's forecasts, meaning AI adoption among companies rising from 8.4 to 45 percent within a decade, the current fiscal model could become increasingly hard to sustain without changes.

For Poland, the stakes are higher than for many other EU countries, since the country still posts relatively low productivity and heavy budget dependence on labor taxes, alongside an aging population and rising social spending. Losing even a fraction of a percentage point of GDP to erosion of the PIT and ZUS base would mean having to find savings or new revenue sources elsewhere.

What comes next

None of the economists quoted has so far proposed a ready-made solution acceptable to all sides of the dispute. Some voices in the public debate are pointing in a different direction than a CIT hike, suggesting, for instance, making workers co-owners of the capital generated by the AI deployments they took part in. For now, the issue remains at the diagnosis stage: the World Bank and the panel of economists agree the problem is real, but decisions on concrete changes to the tax system still lie in the future.