Poland's ruling United Right coalition is hoping 2022 will be a year of economic transformation for the country, stimulated by the politically controversial Polish Deal, the Government's landmark package of sweeping economic, tax and social policy reforms.

The reforms outline significant changes for Polish households, businesses, multinational corporations and local governments, with strategic goals leading up to 2030. Coming into force on 1st January, 2022, the policy package – also known as the PND (Polish New Deal) – looks set to become one of the main drivers of Poland's post-pandemic recovery and a major contributor to creating jobs and attracting inward investment.

At the same time, the forthcoming plan has been subject to fierce criticism from Polish business communities over its alleged punitive impact on SMEs and the middle class through increased tax liabilities. The political debate around the PND was one of the main catalysts of the break-up of the Polish governing coalition earlier this year and the policy package remains politically controversial, with critics claiming it is designed to bolster support among the ruling bloc's low-income electorate ahead of the 2023 parliamentary elections.

Alongside this controversy, the introduction of the PND comes at a difficult time for the country's ruling bloc as the Government, led by PM Mateusz Morawiecki, remains embroiled in a long-running dispute with the EU over rule-of-law issues and is struggling to secure crucial recovery funding from Brussels.

As the main tax provisions of the PND will enter into force from January, Aretera takes a more detailed look at this flagship economic and social policy, its implications for current and potential investors present in CEE's largest market, as well as the turbulent relations between Warsaw and Brussels.