Central and eastern European countries are raising value-added tax rates in what analysts call the most sweeping changes in years. Hungary remains the EU leader with a standard VAT of 27%, the highest in the bloc. The region’s average now hovers around 20%, with several nations pushing rates upward to shore up strained budgets.
According to a study by Forvis Mazars cited by the Polish daily Rzeczpospolita, 2026 marks one of the most significant VAT overhauls in the region. Romania lifted its standard rate from 19% to 21% and merged its reduced rates of 5% and 9% into a single 11% bracket. Estonia increased its standard VAT from 22% to 24%, while Kazakhstan raised it from 12% to 16%. Hungary’s 27% standard rate stands well above the regional average and remains the highest in the European Union.
In Poland, the standard VAT rate stands at 23%, covering most goods and services. Reduced rates apply to specific categories: 8% for food, pharmaceuticals, and certain services; 5% for books, newspapers, and basic foodstuffs; and 0% for intra-community and export supplies. Additionally, a flat rate of 4% applies to taxi drivers and 7% to lump-sum farmers under the VAT Act, as reported by EY.
Pressure on public finances
Kinga Baran, head of tax advisory services at Forvis Mazars in Poland, told Rzeczpospolita that central and eastern European countries face several structural tax challenges in 2026. – We are observing growing fiscal pressure resulting from the need to finance increased public spending, including energy transformation, defence expenditures, and rising social system costs. Consequently, many countries are deciding to hike indirect and direct tax rates or limit available preferences – she said.
The wave of increases reflects deeper fiscal strains. Governments are trying to balance budgets after years of pandemic-related spending, the energy crisis, and military build-up triggered by the war in Ukraine. Higher VAT rates provide immediate revenue, but they also risk dampening consumption and hitting lower-income households hardest.
Poland’s position in the region
Poland’s 23% standard rate places it slightly above the regional average but below Hungary’s 27% and Estonia’s 24%. The country retains a complex system of reduced rates, which policymakers have debated simplifying. Some economists argue that narrowing the gap between standard and reduced rates could improve efficiency and revenue stability.
For now, the Polish government has not announced any immediate changes to VAT, but the trend in neighbouring countries suggests that further adjustments cannot be ruled out. The pressure to finance growing public obligations, especially in defence and energy transition, remains strong. As the region’s fiscal landscape evolves, businesses and consumers alike must prepare for a higher tax burden.
Źródło: WNP.PL, Fot. Shutterstock
