Will OKI be a product worth recommending? The expert shows what can be done better

The Ministry of Finance presented a draft act on the General Investment Account (OKI). It is largely consistent with the idea outlined a few months ago, but there are some significant changes. The expert takes a closer look at them.

Specifically, the wealth tax rate

The most important change is the precise determination of the property tax rate on assets above PLN 100,000. PLN, instead of previous estimates of 0.8-0.9%. – he enumerates Marcin Materna, Head of Research, Millennium BM, CFA, MBA. According to the project, it is to be 19 percent. NBP reference rate of October 31 of the previous year, with a minimum rate of 0.1 percent introduced.

It is a pity that an upper limit was not decided at the same time, e.g. at 1%. The bear market + recession + rising interest rates + rising asset tax scenario is not a good combination for an investor.

Only PLN and WSE? Limited diversification

Then, unfortunately, it gets worse. The project introduces a limitation of Belka's tax exemption only to assets denominated in PLN. The only allowable foreign exposure in a foreign currency is to be possible through investment funds, with an additional limit – a maximum of 30%. fund assets.

In practice, this will force investors to build their portfolio mainly on the WSE or use PLN-denominated – and unfortunately more expensive – ETFs for foreign markets, or shares listed on the GlobalConnect market (where we often have a higher bid-ask spread than on the base market).

Given the current easy access to global markets, this is, in my opinion, an anachronistic solution. It limits global diversification, which is particularly important when most of the financial assets of Polish investors are already strongly dependent on the economic situation in Poland.
Assets on OKI will be largely invested in debt instruments related to the Polish market. The introduction of such a currency restriction seems to be an unnecessary complication of the system, with no real benefits. It rather looks like an attempt to artificially drive demand for the WSE.

However, I am not convinced that this is what it should be about. What is good for the capital market as such does not automatically have to be best for the individual Polish investor.

No indexation of limits – the real value will decrease

Another problem is no automatic indexation of tax-free asset amounts. Without indexation, the real value of the exemption will be smaller and smaller each year. It is difficult to compare it with solutions such as IKE, IKZE or PPK, where, on the one hand, annual contribution limits increase along with salaries, and on the other, the value of assets covered by tax relief is not limited at all.

In the case of OKI, the limit means that after reaching the level of 100,000 PLN (including deposits up to PLN 25,000) investing further becomes a more complex decision. This does not mean that it is meaningless – but it requires a deeper tax and investment analysis.

So we are introducing another limit, the real value of which will depend on political decisions. It may turn out that – just like tax thresholds – after a few years it will be completely detached from economic realities.

Will OKI be a product worth recommending?

Will OKI be a solution worth recommending in its current form? Up to 100 thousand PLN (including deposits up to PLN 25,000) – yes. For larger portfolios, the calculation of tax benefits becomes much more difficult.

Could OKI be designed better? Of course. It would be enough to:

• expand the catalog of tax-exempt assets to include foreign investments,
• introduce a mechanism for indexation of exemption thresholds.

Despite these reservations, compared to other ideas of the Ministry of Finance from recent years, OKI is one of the better solutions. For most Poles, this will be a sufficient product to obtain full exemption from the Belka tax.

OKI will not be a perfect account – it contains annoying “stars” and limitations. However, in my opinion, they can be assessed similarly to PPK:
It's not perfect, but that doesn't mean it's bad – concludes Marcin Materna.

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