Differentiation of Fiscal Effects of Local Tax Policy in Countries Using Area-Based Property Taxation: the Case of Poland

  • Paweł Felis Warsaw School of Economics, Finance Institute
  • Joanna Szlęzak-Matusewicz Warsaw School of Economics, Finance Institute
  • Henryk Rosłaniec University of Economics and Human Sciences in Warsaw
Keywords: local tax policy, property tax, area-based property taxation, tax authority tools


The paper addresses differences in financial effects of local tax policy. Its aim was to examine the effects of decisions taken within the realm of tax authority in a country which applies area-based property taxation. The paper validates the hypothesis, according to which the impact of local tax policy upon tax revenues of local units depends on the social and economic potential of regions (in Poland called “voivodeships”). We believe that municipalities (called “gminas” in Polish) are more active in pursuing local tax policy (i.e., in reducing property tax rates) in regions whose social and economic position is weaker. Statistical and econometric analyses confirmed our theoretical assumptions and provided the evidence that the hypothesis is correct. By using econometric models, in this paper we also succeeded in identifying variables which help in explaining the real scale of reductions of property tax rates.


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