The paper distinguishes two kinds of tax policy. For one thing, the nominal rates of respective tax instruments are known. That relates primarily to tax rates, but also tax bands and the amounts of tax deductions and allowances. As nominal tax rates are explicit, they represent an objective of tax policy, namely the planned volume of tax revenue. Therefore, in the analysis presented, they constitute a reference point. On the other hand, The Ministry of Finance announces effective tax rates which obviously differ from the nominal ones. The difference results from the impact of the remaining tax policy instruments, e.g. allowances and deductions (most relevant to the research presented). Allowances are designed to achieve specific goals, e.g. create better conditions for the development of housing or encourage citizens to enhance their professional qualifications. This entails a clash of tax policy goals as some of them - the general economic ones - are represented by nominal tax rates, while the selective goals are achieved through tax breaks. Thus the gap between the tax amount intended by the legislators and the amount actually paid represents the degree of failure to implement tax policy. The paper aims to interpret the differential between the nominal and effective tax rates. It comprises three parts:

The first part presents the nominal and effective tax rates as well as allowances and deductions from personal income tax. Thus the subject of the subsequent considerations is introduced.

The second and key part is devoted to the implementation of tax policy objectives. It comprises two sub-chapters. The first one presents the measures allowing to assess tax policy implementation in the short (up to 1 year) and medium (up to 3 years) term. The second attempts to interpret the results for both terms in a static as well as dynamic expression.

The final part presents general conclusions and a summary.

The paper is enclosed with Excel spreadsheets containing the numerical results obtained.