In 2023, donations to non-profit organizations for the year 2022 reached a record value of 1.53 billion zlotys, reported by the Ministry of Finance. At the same time, a decrease in taxpayers transferring 1.5% of their taxes to non-profits was noted. Hence, the average amount of given deduction increased from 70 zlotys in 2022 to 121 zlotys in 2023.
What we predicted last year and observed at the beginning of this year has become a reality – the number of taxpayers who transferred 1.5% of their taxes to non-profit organizations has fallen, but the total amount donated has increased. This phenomenon is the result of the fact not all taxpayers had to pay taxes in 2022. Those who earned minimal wages, who didn’t earn above the tax-free amount did not pay any income tax, and therefore could not donate 1.5% to their chosen non-profit organization. Currently, there are more than 3 million people in this situation, a significant increase from the 1.5 million in 2021. Therefore, we observe a significant increase in the number of taxpayers earning a minimal wage who did not pay personal income tax in 2022.
Despite the decrease in the number of people who could make a deduction, the total amount donated as part of the 1.5% increased from 1.115 billion to 1.53 billion zlotys. This is over 37% more compared to the amount donated in 2022, even though the number of taxpayers who gave a donation has fallen by 21%.
A change in the income tax increase from 1% to 1.5% came into effect on July 1, 2022. This was a response to the appeal from non-profit organizations who feared a significant decrease in revenues due to the tax decrease. Most of the personal income taxes, from which the 1.5% tax is deductible, apply to the tax scale used by workers and entrepreneurs.
Piotr Juszczyk, Head Tax Advisor at inFakt
