In a bid to stop mass emigration of its young people, the Polish government has given its support behind a Bill that would abolish income tax for most workers under 26 years of age.

According to Polish finance minister Marian Banaś, it is estimated that around two million young people would benefit from this proposal.

The legislation is yet to be passed by legislators. But, given that the government supports the bill and its Law and Justice party has a majority in parliament, it is expected to become law.

The legislation as currently drafted would mean that Polish citizens aged 26 or lower would not pay any income tax whatsoever, provided their annual income is lower than 85,528 Polish zloty (around €20,000 euros per year).

1.5 million citizens have left Poland since it joined the EU in 2004.

If passed, the bill will cost around 2.5bn Polish zlotys (€600m) to implement. These tax breaks are part of a package of measures aimed at ensuring the ruling Law and Justice Party is returned to power in the general election this November. Extensions to child benefit, increases to pensions and improvements to local transport have also been promised.

Although the bill was passed with an overwhelming majority, it has not been unanimously accepted. Liberal MP Ryszard Petru called the draft law an example of “cunning populism”, whilst Iga Magda of Poland’s Institute for Structural Research said there were bigger obstacles preventing young people from entering the labour market.

Employers in Poland have become increasingly reliant on migrant workers from Belarus and Ukraine.

Age discrimination and justification

The proposed bill could fall foul of European age discrimination laws as it would treat one age group, namely those aged 26 or over, less favourably than others.

The prohibition of age discrimination is firmly enshrined in EU law. The ECJ has held that there is a general principle of non-discrimination in EU law which prohibits age discrimination, and the Framework Directive 2000/78/EC also requires EU member states to implement legislation in a non-discriminatory way. The ECJ does not need to give a ruling before a national court is able to set legislation aside.

If challenged, the central issue in this case would be justification: is the legislation an “appropriate and necessary” (ie proportionate) means of achieving a legitimate aim?

The proposed bill could breach EU age discrimination law unless justified.

The Polish government would need to firmly establish the legitimacy of the aim behind the legislation Judging from the comments made to date about the legislation, they might be able to do this. Finance Minister Marian Banaś has argued that it will increase workforce participation amongst young people.

Determining whether the legislation is a proportionate way of achieving that aim could be more difficult. It will need hard evidence to support its case. The cap on untaxed level of earnings might help to support this (although the level it is set at is still quite generous: at 48,000 zlotys, average earnings in Poland are only around half the 85,000 zloty cap).

Reducing the costs of employing people on relatively low wages will allow young people to have an easier start on the job market and people working ‘off the books’ to return to the mainstream job market. It will also help increase workforce participation among young people and reduce unemployment in that age group
— Polish Finance Minister Marian Banaś

For more on age discrimination in Poland, read our summary of Polish age discrimination law.