Effectiveness and Efficiency of Polish Revenue Administration after the 2017 Reform in the Context of Tax Process Digitalisation

Abstract

This article examines whether the 2017 reform establishing the National Revenue Administration (Polish: Krajowa Administracja Skarbowa, abbreviated KAS) and tax process digitalisation improved both collection effectiveness and operational efficiency. The study covers the years 2017–2024 and draws on data from the Ministry of Finance, the Supreme Audit Office, the European Commission, and the OECD. Two research hypotheses were tested. Hypothesis H1 assumed that KAS digitalisation increased VAT collection effectiveness but had an asymmetric impact on the tax system. It neither reduced the CIT gap proportionally nor significantly improved operational efficiency. Hypothesis H2 proposed that digitalisation transformed the KAS supervision model from traditional on-site controls to algorithm-driven verification procedures, encompassing both automated checks and manual verification activities guided by risk profiling.

Both hypotheses were confirmed. VAT collection effectiveness improved markedly: the VAT gap decreased from 24.1% to 6.9% and the VAT Revenue Ratio (VRR) increased from 35% to 46%. The CIT gap fell to 33%, while the CIT-Revenue Ratio (CIT-RR) rose only to 18%. The supervision model transformed substantially: traditional controls declined by 59.6%, while verification proceedings increased by 143%. The accuracy rate for selection into audits reached as high as 99.2%. Paradoxically, operational efficiency did not improve: collection costs oscillated around 1.8–2.0 PLN/100 PLN of revenue in recent years, and average proceedings time increased. The article identifies three priorities for further reform: tax regulation stabilisation, investment in human resources, and enhanced monitoring of international profit transfers.