Budget deficit smaller than planned. The government has released data for 2025.

Ashley Davis24/02/2026

0 70 8 minutes read

The estimated implementation of the state budget in 2025 in relation to the Budget Act for 2025 was:

– the Ministry of Finance announced on its website.

The planned gap in finances was to amount to PLN 288.7 billion, so this is a positive surprise.

It is not about the fact that income has increased beyond plan, in fact it is quite the opposite. The planned revenues were PLN 633 billion, but there were only PLN 595 billion. However, the government spent much less than planned. Specifically, PLN 870 billion, instead of PLN 922 billion provided for in the Budget Act.

New PIT division

“2025 was the first period in which the reform of the income of local government units (LGUs) was in force, which changed the method of calculating the share in the PIT tax of these units. After the changes, the PIT income of local government units is calculated in relation to taxpayers' income, and not tax revenues, as was the case under the previous legal status,” explains the ministry.

The entry into force of new regulations resulted in increase in PIT revenues going to local governments, which in 2025 received PLN 174.1 billion, which is an increase of approx. PLN 92.9 billion (114.5%) year-on-year. This was the main reason for the decline in budget revenues in 2025.

State budget revenues in 2025

In 2025, the state budget revenues amounted to approximately PLN 594.6 billion and were lower by approximately PLN 28.7 billion (i.e. 4.6%) compared to 2024. Under comparable conditions, i.e. without the reform of local government shares, the state budget revenues in 2025 would amount to PLN 697 billion, i.e. PLN 102.5 billion more and would be approximately PLN 73.8 billion PLN higher than in 2024 (+11.8%).

Tax revenues of the state budget amounted to PLN 529.2 billion and were lower than in 2024 by approximately PLN 26.7 billion (i.e. 4.8%), including:

VAT revenues amounted to PLN 321.6 billion and were higher by approximately PLN 34 billion (i.e. 11.8%) compared to 2024,
revenues from excise tax amounted to PLN 92.5 billion and were higher by approximately PLN 2.2 billion (i.e. 2.4%) compared to 2024,
CIT revenues amounted to PLN 63.7 billion and were higher by approx. PLN 3.4 billion (i.e. 5.7%) compared to 2024. If local government shares were determined under the old rules (with an adjustment for 2023), state budget revenues from CIT in 2025 would amount to approx. PLN 71.1 billion, i.e. PLN 7.4 billion more and would be 18.1 percent higher than in 2024,
PIT revenues amounted to PLN 28.8 billion and were lower by approx. PLN 68.8 billion (i.e. 70.5%) compared to 2024. Under comparable conditions, i.e. if the reform of local government revenues had not been introduced, state budget revenues from PIT in 2025 would amount to approx. PLN 118.6 billion and would be higher by approx. PLN 21.0 billion y/y (21.5%).

The share of tax revenues of the state budget, together with shares in PIT and CIT, which went to local government units, in relation to GDP was 18.8%. in 2025 compared to 18.2 percent in 2024 and 17.0 percent in 2023. Of this, the share of VAT in relation to GDP was 8.3%. in 2025 compared to 7.9 percent in 2024 and 7.2 percent in 2023

The amount of budget revenues in 2025, in addition to the lower than forecasted growth rate of real processes (preliminary estimated GDP growth last year was 3.6%, compared to the forecasted level of 3.9% for the purposes of preparing the budget act for 2025), was influenced by the development of nominal values. In 2025, we saw a slowdown in price growth. The disinflation observed in 2025 was beneficial for consumers, but from the point of view of collecting budget revenues, a lower price increase translates directly into a lower increase in the tax base, which translated into weaker than forecasted state budget revenues last year. The Budget Act for 2025 assumed inflation at the level of 5.0 percent, but it ultimately amounted to 3.6 percent. In the case of sold industrial production, a price increase of 2.6% was forecast. in 2025, while according to preliminary data, prices of sold industrial production decreased by 1.6%. Moreover, high interest rates encouraged households to save, which further reduced consumption growth.

The main reason for the decline in state budget revenues from PIT in 2025 was the reform changing the method of determining, the amount and the method of transferring local government units' shares in PIT revenues.

The total amount of PIT revenues for the public finance sector in 2025 amounted to PLN 202.8 billion and was higher by approximately PLN 24.1 billion (13.5%) y/y. In relation to GDP, the total amount of revenues increased and amounted to 5.2%. in 2025 compared to 4.9 percent in 2024 and 4.2 percent in 2023

The total amount of CIT revenues for the public finance sector in 2025 amounted to approximately PLN 91.8 billion and was higher by approximately PLN 5.2 billion y/y, which means an increase of 6%. y/y. In 2024, local government units received PLN 26.4 billion from the CIT tax, while in 2025 the amount of shares amounted to PLN 28.1 billion, which is an increase of approximately PLN 1.8 billion (6.8%) y/y.

In the case of excise tax, revenues in 2025 were influenced by an increase of 5%. excise duty rates on ethyl alcohol, beer, wine, fermented beverages (excluding cider and perry with a strength of up to 5%) and intermediate products. Moreover, by 25 percent the quota for cigarettes was increased by 50%. quota rate for innovative products, by 38 percent quota rate for smoking tobacco, by 25 percent rate on cigars and cigarillos, by 75 percent. rate for liquid for electronic cigarettes and by 38 percent. rate for dried tobacco.

In 2025, non-tax revenues amounted to PLN 62.1 billion and were lower by approximately PLN 2.9 billion (i.e. 4.4%) compared to 2024.

In 2025, the state budget received payments from the auction of greenhouse gas emission allowances in the amount of approximately PLN 12.1 billion. This amount was lower by approximately PLN 2 billion, i.e. approximately 14.3%. compared to 2024. This was related to the lower price of greenhouse gas emission allowances than a year ago.

State budget expenditure in 2025

The implementation of state budget expenditure for 2025 amounted to PLN 870.2 billion, i.e. 94.4%. plan, at the same time it was higher by approximately PLN 35.9 billion (i.e. 4.3%) compared to 2024 (PLN 834.2 billion, i.e. 96.3% of the plan).

Comparing the implementation of expenses for 2025 with their implementation in 2024 higher performance results from the transfer of funds in the total amount of PLN 56.2 billion:

PLN 34.6 billion from part 20 – Economy for the repayment of liabilities related to bonds with interest of the Polish Development Fund SA issued in 2020 to finance the government program “Financial Shields”,
PLN 21.6 billion from part 19 – Budget, public finances and financial institutions, to the COVID-19 Counteracting Fund to finance liabilities mainly due to the redemption of bonds issued to the Fund by Bank Gospodarstwa Krajowego in 2020-2023.

In 2025, the highest expenses were recorded in the following parts of the state budget:

Social Insurance Institution – in the amount of PLN 180.5 billion, i.e. 91.3%. plan,
National Defense – in the amount of PLN 118.6 billion, i.e. 100.0 percent plan,
Service of the State Treasury debt – in the amount of PLN 72.8 billion, i.e. 96.5%. plan,
Budgets of Voivodes – in the amount of PLN 58.7 billion, i.e. 97.2%. plan,
General subsidies for local government units – in the amount of PLN 50.8 billion, i.e. 100.0 percent. plan,
Internal affairs – in the amount of PLN 48.0 billion, i.e. 95.5%. plan,
Health – in the amount of PLN 46.2 billion, i.e. 99.7%. plan,
Budget, public finances and financial institutions – in the amount of PLN 38.4 billion, i.e. 98.7%. plan,
Economy – in the amount of PLN 37.0 billion, i.e. 99.1%. plan,
EU own funds – in the amount of PLN 35.3 billion, i.e. 99.8%. plan,
Higher education and science – in the amount of PLN 33.0 billion, i.e. 99.5%. plan.

Comparing the implementation of expenditure in 2025 to 2024, higher implementation was noted, among others: In:

part 46 – Health, PLN 16.3 billion more was allocated, in connection with the provision of subsidies to the National Health Fund and funds for internships and medical specializations, as well as for teaching and research activities;
part 73 – the Social Insurance Institution transferred over PLN 9.2 billion more, which was related to the implementation of the “Active Parent” program (the program supporting parents in effectively combining family roles with professional activity was launched in October 2024) and the payment of support benefits (the aim of which is to provide people with disabilities with assistance to partially cover expenses related to meeting special life needs), in addition, ZUS expenses include the indexation of benefits pensions from March 1, 2025. Additionally, on July 1, 2025, the payment of funds for the implementation of the so-called “widow's pension”, which allows you to combine the survivor's pension of your deceased spouse with your own pension benefit. However, in terms of the subsidy transferred to the Social Insurance Fund for the payment of state-guaranteed benefits, the implementation amounted to PLN 64.4 billion and was lower than the implementation after 2024 by PLN 0.3 billion, i.e. by approximately 0.5 percent;
part 79 – Service of State Treasury debt, more funds were allocated for expenditure by PLN 7.0 billion, which was mainly the result of an increase in the serviced debt and a lower interest rate on the serviced debt;
part 39 – Transport, PLN 4.8 billion more was transferred, including in connection with the increase in the amount of subjective subsidy for the implementation of the multi-annual program “Government Program to support the tasks of railway infrastructure managers, including maintenance and renovation, until 2028”;
part 42 – Internal affairs, PLN 3.7 billion more was transferred, including: due to higher expenses allocated to poviat and provincial police headquarters and cash benefits from retirement pensions. In addition, a higher targeted subsidy was provided to the Government Agency of Strategic Reserves and funds for the construction and modernization of state border security on river and land sections of the border with Belarus;
part 85 – Voivodes' budgets, the implementation was higher by approximately PLN 3.7 billion, mainly in terms of expenses related to co-financing social welfare homes and centers, support centers and the payment of permanent benefits and family benefits and from the alimony fund, as well as expenses related to combating infectious animal diseases;
part 29 – National defense, the implementation was higher by PLN 3.1 billion, including in connection with the purchase of military equipment and weapons;
part 84 – The EU's own funds were transferred by PLN 2.1 billion more, which is mainly due to the higher level of EU budget expenditure this year. compared to the previous year and from higher payments to the EU for customs duties as a result of their higher collection at the borders.

However, under part 82 – General subsidies for local government units, the implementation was lower by PLN 69.0 billion year on year, due to the amendment to the Act on the income of local government units, which introduced significant changes, among others: in the rules for determining the general subsidy for local government units. From 2025, the general subsidy is of a supplementary nature, hence the lower amount of expenditure for this part compared to 2024. Local government units have increased shares in PIT and CIT taxes.

The highest savings compared to the 2025 plan. in the total amount of approx. PLN 51.4 billion it was noted, among others, in the following budget parts: