Tax Expenditure Budget: the Polish Experience

Seeking the solutions which increases fiscal discipline, is the subject of particular in-terest in last years. It’s such more remarkable in terms of global financial crisis condi-tions, when possibilities of gaining revenues are significantly limited and, on the other hand, public debts of most countries are growing rapidly. Therefore all public spending, even indirect ones – including tax expenditures, should be monitored. It allows govern-ments to compare the real costs of various public programs, also makes possible appro-priate management of public finance and eventually, to seek more effective solutions. This paper presents the theory behind the concept of tax expenditures, as well as the different definitions of the notion employed by countries which produce tax expenditure reports. The authors discuss the need for a common definition of „benchmark tax” – a reference point for identification of tax expenditures and international comparisons. An-other purpose of the article is to present the way in which the idea of tax expenditures was implemented in the Polish report on tax preferences and to assess the budgetary ef-fects of tax expenditures.