Appel of the Union of Entrepreneurs and Employers for a 12-month-long moratorium on new burdens

Warsaw, 23^rd December 2020

APPEAL OF THE UNION OF ENTREPRENEURS AND EMPLOYERS FOR A 12-MONTH-LONG MORATORIUM ON NEW BURDENS

• The year 2020 has been the most difficult period for Polish companies in many years. Within a few months there have been three giant blows to businesses: a tight lockdown in March-May, reduced demand in “social sectors” in June-August, finally a second wave of the epidemic that started in September, which resulted in the ongoing re-closure of a significant part of the economy.
  
  
• The ability to adapt to the new conditions and the liquidity aid provided by the government helped entrepreneurs survive the difficult period in the spring. Unfortunately, the following months seriously undermined the stability of some industries, and the second lockdown poses an enormous threat to all companies in Poland.
  
  
• Examples of other OECD member states, such as Australia, Sweden, the Czech Republic or Germany, show that in response to the crisis caused by the coronavirus pandemic, a significant part of governments have decided to cut taxes and reduce administrative burdens.
  
  
• The Australians are pursuing a consistent programme of tax cuts, the Swedes plan to lower PIT and social security premiums, while the Germans and the Czechs have decided to cut VAT. Similar trends (towards lowering burdens) are also visible in the policies of the United States.
  
  
• We regret to observe that Poland has not joined this trend. Instead of striving to reduce the burden and to deregulate, Poland has decided to introduce solutions unfavourable for business. These include, for example, the taxation of limited partnerships with CIT, the introduction of the sugar tax, the amendment to the “rain tax” or the restrictive implementation of the audio-visual directive.
  
  
• Studies show that the willingness of Polish companies to invest has been the lowest in years. According to the “Busometr” survey by the Union of Entrepreneurs and Employers, only 32% of entrepreneurs plan to make any investments in the coming months. On the one hand, this is a result of the uncertainty related to the spread of the epidemic, and on the other – a consequence of the lack of regulatory stability and the introduction of new, unfavourable regulations, mentioned above.
  
  
• Public opinion surveys show that the majority of entrepreneurs (68% according to Kantar Global Business Compass) believe that the effects of the pandemic are severe for enterprises. According to a poll carried out by CBOS at the turn of May and June, every tenth respondent had to limit operations and reduce employment in the company.
  
  
• The impact of the epidemic is also visible in objective economic data – Poland’s seasonally adjusted GDP shrank by 7.9% year-on-year in the 2^nd quarter of 2020. Further reductions in economic activity in the fall and winter will worsen the results for the whole year.
  
  
• We would like to make it clear that the next twelve months constitute the worst possible period to introduce new burdens. Companies are facing the consequences of the epidemic, lowered demand, and the effects of a lockdown – additional taxes, increased levies or the introduction of new administrative obligations can be a fatal blow to many companies.
  
  
• The consequences of introducing additional burdens in such a difficult economic time may be far-reaching and severe. They may concern both the labour market and the investment rate, economic activity, and ultimately – the affluence of the Polish nation. One should remember that bankruptcies of companies or significant drops in their revenues translate into a reduction in employment or a decrease in wages. This, in turn, translates directly into the deterioration of the situation of employees and their families. The lack of new burdens in the difficult time of the epidemic is therefore a postulate not only pro-business, but also pro-employee and pro-social.
  
  
• Bearing in mind all of the above, we urge the government to adopt a 12-month-long moratorium on all new burdens, including, in particular, those of a tax and para-tax nature, such as the sugar tax or the retail sales tax. Polish businesses must have a chance to survive and recover after the crisis caused by the epidemic. Should the new burdens make it impossible, the scale of the negative impact on the economy may be difficult to predict, and the cost of these burdens will certainly be higher than that caused by the postponement of new levies.

See: 23.12.2020 Appel of the Union of Entrepreneurs and Employers for a 12-month-long moratorium on new burdens

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