10 objectives for the 10th anniversary of the Union of Entrepreneurs and Employers (ZPP)
Our main objective invariably remains
to make Poland a country with the best conditions for conducting business activity and with the best tax system in Europe.
To achieve this, we aim to:
- Introduce voluntary flat-rate taxation of registered income for all businesses.
- Introduce the principle that all economic regulations shall enter into force only on 1 January in any particular year, preceded by at least 12 months’ vacatio legis.
- Introduce a uniform VAT rate.
- Introduce a single tax on the Payroll Fund instead of PIT and National Insurance contributions
- Change the National Court Register (KRS) registration system to reflect the model used for Central Registration and Information on Business (CEIDG).
- Fundamentally change the system of inspections of entrepreneurs – fewer institutions and fewer exemptions from the maximum duration of inspections in legislation.
- Change the system of rewards for officials – bonuses and promotions only for a final decision.
- Thoroughly reform the system of commercial justice – introduce the effective division of cases into minor and major ones, change the procedures and proceed with cases on a day-to-day basis.
- Introduce separate regulatory regimes for small and large companies.
- Adopt a new Tax Code guaranteeing an equal position of parties to tax proceedings.
Objectives adopted during the meeting of ZPP Council held in Nowe Miasto nad Pilicą on 26 September 2019:
- Voluntary flat-rate taxation of registered income for all business activities
Flat-rate taxation of registered income is the simplest form of accounting for income tax for individuals conducting business activities. Unfortunately, the possibility of using it to a large extent is limited – both by the limit of income and by numerous exemptions based on the objects of activity (there are as many as 58 types of activity that cannot be accounted for using the flat rate). Our demand is that these restrictions are removed and the use of the flat rate is made voluntary for all the business activities of individuals.
- Introduction of the principle that all economic regulations shall enter into force only on 1 January in any particular year, preceded by at least 12 months’ vacatio legis
One of the key issues for businesses is the stability and predictability of the regulatory environment. It is the legislation, which undergoes dynamic changes, often in an unexpected direction, that holds back investment and also causes the confidence of entrepreneurs in the state to decline. To put an end to this, we propose that all new economic regulations should enter into force at one particular moment – on 1 January of any particular year – and be preceded by at least 12 months of vacatio legis. This will mean that businesses will only have to adjust to any changes once a year (1 January), and will have at least a year to prepare for this.
- Uniform VAT rate
The complicated system of VAT rates was one of the main problems with this tax. Its excessive specificity has led to many disputes between taxpayers and the tax authorities. The government has responded to the demand of businesses and has significantly simplified the system. This, however, should be the first step towards a holistic change, which is the unification of the rate. The introduction of a uniform VAT rate would mean saving time and effort for both businesses and tax authorities.
- A single tax on the Payroll Fund instead of PIT and National Insurance contributions
ZPP has consistently advocated a reduction in the tax wedge. The burden of tax and contributions on salaries in Poland is far too high. That is why the fundamental premise of our comprehensive tax reform proposal is to abolish personal income tax and social security contributions and replace them with a simple tax on the Payroll Fund. The implementation of this proposal means a net wage increase of 25% for each employee, with no increase in costs for businesses.
- A change in the National Court Register (KRS) registration system to reflect the model used for Central Registration and Information on Business (CEIDG).
The CEIDG registration system for businesses works perfectly, making it possible to open a business completely remotely, via the Internet, within a few tens of minutes. Meanwhile, the model for filing applications with the National Court Register means that the procedure for registering a company, or any business entity other than a one-man business, can take an exceptionally long time. We are therefore proposing to change the system to be similar to the one known from CEIDG – registration, as well as to enable online changes to the entry, using simple forms, registered by officials and not by the courts.
- A fundamental change of the system of inspections of entrepreneurs – fewer institutions and fewer exemptions from the maximum duration of inspections in legislation
A significant problem for businesses in Poland is the system of their control. As many as several dozen institutions can verify and check individual aspects of a company’s activity. Their competences often overlap and are duplicated, making it unclear as to what exactly is the responsibility of each body to control. In addition, the duration of inspections is only limited in theory – the legislation provides for a number of exceptions where the maximum duration of the inspection does not apply. We want to change the system so that there are fewer institutions inspecting companies, their competences are well-defined and the duration of inspections is limited in practice.
- Change of the system of rewards for officials – bonuses and promotions only for a final decision
The effectiveness of representatives of administrative bodies controlling entrepreneurs, including that of tax authorities in particular, is currently measured by the scale of losses to the budget or infringements of obligations ascertained by their decisions. This often has very harsh financial consequences for companies. It is often the case that at the stage of judicial review, these decisions are successfully challenged. For this reason, we want officials to be assessed solely on the basis of final decisions.
- A thorough reform of the system of commercial justice – introducing the division of cases into minor and major ones, changes in the procedures and proceeding with cases on a day-by-day basis.
The last few years have been a period of many changes in the judicial system, including the commercial judiciary. One of the changes has been the reinstatement of a separate procedure for commercial cases. However, we believe that this is still not enough. This is why we have consistently advocated the introduction of a genuine division of cases into minor and major ones (minor cases should be resolved through the maximally simplified procedure) and the principle of proceeding in commercial matters on a day by day basis.
- Introduction of separate regulatory regimes for small and large companies
SME sector entrepreneurs, despite having far fewer resources and fewer opportunities than large companies, are subject to very much the same obligations. As a result, regulations that are virtually imperceptible to multinational companies place a heavy burden on smaller businesses. This is why we call for the introduction of separate regulatory regimes for small and large enterprises within the framework of regulations affecting the conduct of business, taking into account their specific character and possibilities.
- Adoption of a new Tax Code guaranteeing an equal position of parties to tax proceedings
Subsequent governments have made numerous attempts to reform the current Tax Code. However, no one has managed to draft a motion with sufficient support, so the proposals to date have not become legislation. In our opinion, the current Tax Code does not sufficiently secure the rights of taxpayers and does not guarantee them an equal position in relations with the tax authorities. The supremacy of the tax authorities over the taxpayer provided for in the rules on tax proceedings is far too high. That is why one of our objectives is to enact a new Tax Code that guarantees as equal a position of the parties as is reasonably practicable under the tax legislation regime.