Warsaw, 20^th May 2019

 

The most dangerous version of the entrepreneur’s test is the action of the ministry without changing the law, on the basis of a change in the interpretation of the law

 

Regardless of whether its introduction will be a legislative amendment or a change in the way the law is applied, the “entrepreneur test” can have fatal consequences both for the economy and for a large part of entrepreneurs – this is a basic conclusion of the report of the Union of Entrepreneurs and Employers “The entrepreneur’s test. How the government raises money for its promises”.

The “entrepreneur’s test” was supposed to be a tool for verification whether a given entity is conducting real economic activity, and thus, has the right to make use of the flat PIT rate as well as of the preferences in the field of social security premiums. Experts of the Union of Entrepreneurs and Employers indicate that the government’s information policy in this field can be characterised by total chaos.

“For the very first time, the test appeared in some informal statement of Deputy Minister Filip Świtała,” recalls Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “Later, the Ministry denied this information and claimed that there was no project in the pipeline. Then, the “entrepreneur’s test” appeared in a draft of the National Long-Term Financial Plan only to be replaced by “tightening of the classification of revenue from non-agricultural business activity” in the final wording of the Plan. In the meantime, both Minister of Technology and Entrepreneurship Jadwiga Emilewicz and Prime Minister Mateusz Morawiecki would swear that there wouldn’t be any test. Entrepreneurs have no idea what to expect.”

The set of unknown variables is not limited, however, only to the question whether the test will be introduced. There are also doubts that concern the potential formula planned by the Ministry of Finance, that is its authors. Due to the multitude of changes in what government representatives say in the media as well as in the National Long-Term Financial Plan itself, it is not possible to determine if there are (were) amendments planned to be implemented or “only” changes in how the already applicable law would be enforced. While Minister Emilewicz claims that no legislative changes are planned, in the National Long-Term Financial Plan, it is clearly stated that the tool that the legislator intends to use in order to tighten the classification of revenue from “non-agricultural business activity” is, among others, amendment to the Act on Personal Income Tax.

Experts of the Union of Entrepreneurs and Employers emphasise the fact that regardless of the chosen method, the introduction of the test will have serious economic and legal consequences.

“One can even say that not amending the law would be even more dangerous than the introduction of new regulations,” says Jakub Bińkowski, Secretary at the Union’s Law and Legislation Department. “If new provisions were adopted, they would be effective from their entry into force, without the possibility of applying them in such a way that would have a retroactive effect. They would also be subject to the process of social consultations. If the variant of amending the way of applying already existing regulations were chosen, some entrepreneurs could expect their declarations to be challenged even up to five years back.”

Threats related to the entrepreneur’s test unfortunately are not limited to tax consequences and the need to pay the difference between the tax calculated in accordance with the tax scale and the flat tax. The statement that a given entity contracting with another entity did not run business activity, has serious consequences in the field of VAT or social security contributions. Moreover, it would not be neutral from the penal-fiscal point of view. If it were decided to undermine the type of legal relationship between existing contractors and determine that their relationship was that of employment, the test would also lead to unpredictable complications in the field of labour law.

“There need to settle unused holidays would arise, whereas the ‘employer’, that is the hitherto contractor, would be responsible, for example, for unpaid premiums and advance tax payments as a tax payer,” warns Cezary Kaźmierczak. “The magnitude of risks is enormous, while the likelihood of achieving the assumed financial effect I assess as very low. The government claims that they will gain PLN 1.2 billion, but considering the shape of the test declared so far, one can easily come up with at least a few ways to avoid it. The British example shows that charging taxpayers this way will not be as easy as the decision-makers imagine.”

 

20.05.2019 Report of the Union of Entrepreneurs and Employers: Entrepreneur’s test. How the government raises funds for its promises

 

Fot. F1Digitals / pixabay.com

Warsaw, 7^th May 2019

 

Sudden treacherous changes in tax interpretations returning and taxes being calculated 5 years back?
Is the Constitution of Business really in force?

 

Entrepreneurs from the HoReCa industry are experiencing problems that according to the government should not exist. Their non-existence was supposed to be guaranteed by the Constitution for Business and its provisions saying that “law is not retroactive”, as well as by the so-called “principle of legal certainty”. The problems concern VAT rates applied before 2016. That year, the Minister of Finance issued a general interpretation, according to which the sale of ready-to-eat dishes should be taxed at the appropriate for restaurant services rate of 8%, not 5% appropriate for delivery of ready meals and meals.

“When I was starting my own company, I looked at the website of the Ministry of Finance where one could find over 200 individual interpretations saying the appropriate VAT rate for the sale of ready meals was 5% and so I used this rate” says one of the victims, Natalia Urban-Pałka, McDonald’s franchisee. “Everyone used this rate. Now we have to pay taxes with interest for 5 years back.”

“We have long indicated that VAT is the public levy that causes the most difficulties, even in terms of rates. It is absurd that a tax rate is attributed almost on an individual basis to a particular spice or vegetable. This problem is being partially solved by the new tax matrix, which is why we are supporting the direction in which this tax simplification is going,” comments Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers.

A high percentage of entrepreneurs from the HoReCa industry applied the 5% tax rate before 2016. Quite often, this entitlement was supported by individual tax interpretations. After the Ministry issued a general interpretation presenting a different position, these companies almost immediately began making use of the higher 8% rate. Unfortunately, Polish tax authorities initiated proceedings in which they started to undermine tax declarations submitted in periods preceding the issuance of an individual interpretation.

“A colossal problem arose,” claims Jakub Bińkowski, secretary at the Union’s Department of Law and Legislation. “The Ministry stated unequivocally that its intention was that the new rate should be applied to ‘future operations’, that is, from the moment the general interpretation was issued. However, tax authorities have individually decided to question earlier settlements, concerning periods when the 5% tax rate was widely used, since it had been confirmed by individual interpretations. I find it hard to call this any other way that a trap set for taxpayers.”

The Union’s experts emphasise that the proceedings are not only against the declared intentions of the Ministry of Finance, but also against the provisions of the Constitution, and almost directly against the principle of legal certainty from the Constitution for Business that came into force almost a year ago.

”The methods used by Jacek Kapica (former undersecretary at the Ministry of Finance in the years 2008-2015) are coming back with a bang. The tactics of changing the interpretations without amending the law, and then calculating tax surcharges for five years, were a nightmare in previous years,” stresses Cezary Kaźmierczak. “Simultaneously for some time now, we have observed that the tax authorities use this method less frequently, the Constitution for Business entered into force as well. It turns out that this is still not enough and entrepreneurs cannot feel safe, even if they adhere to the obtained interpretation.”

Two franchisees from the HoReCa industry participated in the press conference that took place at the seat of the Union of Entrepreneurs and Employers, who presented specific risks resulting from prolonged disputes with the tax authorities. They briefly described the business activity they run, as well as the sequence of events leading to the fact that they are currently facing the necessity to pay surcharge with interest, in spite of the fact that they acted in accordance with the interpretations of tax law in force at the time.

Kaźmierczak appealed to the government that they respect their very own promises made on numerous occasions that such round-ups belonged in the past and that they adhere to acts they themselves enacted.

 

07.05.2019 Report of the Union of Entrepreneurs and Employers: Ambiguously regulated VAT rates and the principle of legal certainty

 

Fot. NickyPe / pixabay.com

Warsaw, 26^th April 2019

 

Experts debate the digital tax

 

The Union of Entrepreneurs and Employers organised a Round Table debate dedicated to the digital tax. The event’s guest of honour was Matthias Bauer, leading expert of the European Centre for International Political Economy.

On 26^th April 2019, at Kafe Zielony Niedźwiedź, a meeting dedicated to the concept of digital tax was organised by the Union of Entrepreneurs and Employers. Representatives of the digital industry and the Union of Entrepreneurs and Employers, as well as Matthias Bauer, an expert of the European Centre for International Political Economy, the author of the report “Digital Companies and Their Fair Share of Taxes: Myths and Misconceptions” participated in the Round Table debate.

The meeting began with a presentation by Matthias Bauer on the main conclusions of his report. According to the expert, the corporation taxation system must undergo a thorough reform, but new forms of sectoral taxes are not the solution to the problem. He pointed, among others, to the fact that entrepreneurs from the digital industry often pay a higher effective income tax rate than companies from “traditional” business.

“The effective tax rate we consider ‘honest’ aside, the introduction of a sectoral tax aimed only at companies in the digital industry, no matter how we understand it, is a completely wrong solution,” said Bauer. “Corporate taxation system must be changed, but its main problem at the moment is its excessively high level of complexity, and additional levies for specific industries only deepen this problem.”

After the short presentation, the discussion began. As Marcin Nowacki, the Union’s Vice-President, emphasises, key conclusions from the ECIPE report coincide with the position of Union of Entrepreneurs and Employers.

“Furthermore, we believe that the digital tax is no solution to the problem of tax avoidance,” added Nowacki. “Both we and our think tank, the Warsaw Enterprise Institute, are in favour of a general, not sectoral, approach to taxation. In our view, a revenue tax would be the optimal solution.”

In the course of the discussion, Matthias Bauer emphasised that there is no rational reason why the new tax would only concern one, individual group of companies. The digital tax alone would not only be unjust, but would also be one of the obstacles to the development of the digital industry in Europe, making it difficult to build the Digital Single Market.

“Of course, taxation is a natural element of a modern state’s functioning, because various public services are financed from taxes,” Bauer stressed the fact. “But in the light of the available data on CIT inefficiencies, it is quite reasonable to ask whether we still need corporate income tax at all? It seems the answer to this question is ‘no’, while the depletion of the state’s revenue would be offset by lower expenditures or additional inflows from other sources.”

 

Fot. geralt / pixabay.pl

Warsaw, 17^th April 2019

 

Poland urgently needs an Energy Doctrine

 

The current state of affairs as well as the prospects for development of the Polish energy sector is our biggest problem in the context of the competitiveness of our entire economy. Failure to address issues and lack of strategic thinking dangerously bring us closer to a systemic recession and decline in the standard of living. Poland urgently needs an energy doctrine that takes into account the processes taking place globally, not just politicians’ wishful thinking. This is the conclusion of the latest report by the Union of Entrepreneurs and Employers “Assumptions for the Energy Development Strategy in Poland”.

The essential condition for improving the business environment in Poland is to create a political consensus around a long-term programme of energy transformation. Without it, one cannot debate a long-term energy transformation of Poland. To ensure stable and competitive energy prices for the Polish industry, a gradual process of generation source and transmission line privatisation is imperative, which will force state-owned producers to adapt their actions to the market.

A four pillar doctrine

1^st Pillar. Change in ownership structure and diversification of generation sources. Systematic replacing state-owned power-generating consortia with privately owned dispersed energy sources. Gradual reduction of the solid fuel share in order to ensure that coal-based power in 2030 accounts for 50% of the Polish energy mix, while the other half is obtained from renewable sources and gaseous fuels. If nuclear power is to join the energy mix, it definitely can only happen after the year 2030.

The largest and newly built coal blocks must remain in the hands of the state, although they will only provide 30-40% of the highest domestic demand. While the 400 kV and 220 kV transmission lines will remain in the hands of the state for many years, the remaining part of generation sources and transmission lines (revitalised 200 MW blocks), wind farms, energy from gas and waste, photovoltaic power, together with 110 kV lines, medium and low voltage lines should be privatised and subject to free market mechanisms.

2^nd Pillar. Coal remains an important source of energy. What changes are the strategy of mining and the importance of the resource itself. This means limiting the extraction to profitable deposits, taking into account the necessary mining investments. Conventional coal-fired energy is only to guarantee electricity supply in the event of a system collapse or increased demand.

3^rd Pillar. Development of renewable energy sources as part of a nationwide policy for the development of dispersed sources. The need to optimise and increase energy efficiency, with the simultaneous risk of further increases in energy prices, make RES investments increasingly commonplace and desirable. Regional programs should be launched and decisions concerning the development of dispersed energy sources should be transferred to local communities, with a nationwide support system for regional initiatives and the assumption that the support period ends after 15 years. The support period can be differentiated for individual technologies.

4^th Pillar. The state must still be responsible for electricity supply. This does not mean, however, that it must be the owner of all generation sources and all transmission lines. Strategic generation sources and strategic transmission lines may, but do not have to, remain in the hands of the state as the guarantor of the country’s energy security. Ultimately, the role of the state must be reduced only to the creation and supervision of energy policy.

Pursuant the above-mentioned assumptions, the Union of Entrepreneurs and Employers recommends the following:

• Rapid implementation of the energy mix changing policy. Gradual reduction in the share of solid fuels, share increase of renewable energy and increasing the share of gas fuel, mainly as a regulator of renewable sources. Within a decade, we should reach the level of 50% in the balance of energy production from gas and renewable sources, and 50% from carbon sources;
• Determining and disclosing domestic black coal resources based on the economic availability of this raw material. Comparison of the national production potential with import possibilities, in terms of prices, dates and delivery guarantees;
• Development of investment plans for coal-fired power plants and mining, based on 50% coverage of the maximum system demand;
• Limiting the operation of lignite blocks until 2030 and replacing them with renewable energy sources, gas blocks, and in the post-mining areas as part of the reclamation of these areas, construction of pumped-storage hydroelectric units;
• Presenting the energy doctrine programme to the European Commission, obtaining acceptance and negotiating free CO₂ emissions, justifying the necessity of executing a comprehensive transformation over a longer period of time;
• Enabling the fastest possible development of cross-border connections both with EU member states and the closest neighbours;
• Privatising distribution companies in order to force state-owned tycoons to adapt their operations to the market by means of stock exchange instruments, while maintaining state supervision;
• Allowing market players to freely trade in energy, both from domestic sources and imports from any direction;
• As a result of legislative simplification, intensive development of public-private partnership in local governments in the area of launching energy and heat generation sources and creation of local transmission networks;
• Legal regulations enabling the development of energy clusters and cooperatives;
• Intensive development of a small individual energy programme through a system of incentives for recipients as well as through preferential investment conditions in this field;
• One ought to consider the transfer of the Polish programme for nuclear power plants construction to the areas where lignite power plants are gradually decommissioned;
• The decision to build offshore wind farms should be made as soon as possible and to facilitate these investments a separate legislative path ought to be created;
• An immediate return to supporting the development of onshore wind farms which are the cheapest electricity generation source;
• An efficient and reasonable support system for photovoltaic sources should be implemented as soon as possible.

17.04.2019 Report by the Union of Entrepreneurs and Employers: Assumptions for the Energy Development Strategy in Poland 

Warsaw, 24^th April 2019

The Union of Entrepreneurs and Employers presents a substantive education system reform proposal to the Social Dialogue Council

In the face of recent discussions and negotiations centred around the teachers’ strike, conducted among others amongst social partners whose representatives sit on the Social Dialogue Council, the Union of Entrepreneurs and Employers reminds the public opinion of its publication under the title “School for life. Who will pay for our pensions?”. Since the Union perceives the education system as one of the key elements of the future of the state and the economy, we prepared a comprehensive program of reforms aimed at bringing pupils and parents back to their central role in the system.

“Sole discussions about pay issues themselves, or even more so about the formula of debeta about education, seem to be completely unproductive” emphasises Cezary Kaźmierczak, the Union’s President. “That is why we came up with the proposal that our document be the starting point for the debate between the authorities in power and their social partners.”

The education system reform program as proposed by the Union of Entrepreneurs and Employers assumes a thorough reform of the financing model and of the functioning of schools. The document stresses that the “money follows the pupil” principle is not being implemented at the moment, which significantly hinders the introduction of competition mechanisms between schools. The system of awarding educational subsidies is complicated and does not reward the best institutions, and the freedom of financial management of schools is significantly limited by rigid remuneration of teachers set out in the Teachers’ Charter. The Union postulates the liquidation of this harmful law and removing the cap on teachers’ salaries, so that the best can earn much more than they do at the moment. Schools, according to the Union, should be managed by special not-for-profit companies with their own budgets and supervisory boards, which should include representatives of parents, teachers, the local community as well as local entrepreneurs. This way, schools will be able to compete for pupils with each other. According to the Union, it is the lack of competition that led to such a pathological situation in the Polish education system.

“We believe that teachers rightly claim that they earn too little, but their postulates themselves are not right” says Cezary Kaźmierczak. “The point is not to put a different amount of money in the Teachers’ Charter. Even if we do that, the problem will come back to us anew in a few years. The idea is to liquidate the Charter and thoroughly reform the system, so that all teachers can negotiate their terms of employment independently.”

Therefore, in line with the project of the Union of Entrepreneurs and Employers, real supervision over education is transferred to local communities and parents. We believe that these groups together with pupils should be at the centre of the system – not government officials. Only when institutions compete with each other for pupils, the best teachers will be rewarded too.

The report “School for life. Who will pay for our pensions?” was presented to the partners sitting in the Social Dialogue Council as a starting point for further debate on the education system in Poland. The Union of Entrepreneurs and Employers expects a substantive debate regarding the postulates presented in this document, and not subsequent tests of strength taking place at the expense of Polish pupils.

 

Agenda Poland: School for life. Who will pay for our pensions?  

 

Fot. geralt / pixabay.com

4^th April 2019

High non-wage labour costs, high taxes, and excessive bureaucratic obligations – according to entrepreneurs these are the biggest barriers to running business in Poland

High non-wage labour costs, high taxes, and excessive bureaucratic obligations – these are the obstacles considered most harmful for running a company in Poland. These are the conclusions from a survey conducted by Maison & Partners on behalf of the Union of Entrepreneurs and Employers.

It ought to be emphasised that the survey beginning with this edition is carried out on a different business base (previously the database of the Union of Entrepreneurs and Employers, presently of the Ariadna National Research Panel). The sample structure in terms of the size of the companies surveyed in this measurement and the previous ones does not differ, but the demographic structure of respondents has changed considerably. This change may be to a large extent the effect of methodological modification and not of actual differences in the perception of barriers in recent years by Polish entrepreneurs.

The Union of Entrepreneurs and Employers once again asked entrepreneurs from the SME sector about the biggest obstacles for business activity in Poland. In the catalogue of the largest barriers, one can find the following:

Maison & Partners for the Union of Entrepreneurs and Employers, January 2019, N: 733, survey conducted among a group of the SME sector companies representative in terms of workforce size (up to 250 employees).

The most commonplace barriers are a much bigger problem for microenterprises than companies with a larger workforce, as well as for enterprises from the services sector than those from trade and production.

Entrepreneurs arranged the above barriers, pointing out those they considered most challenging in terms of running a business. On the TOP2 barriers list, there are high taxes (57%) and labour costs (52%).

According to the presented data, 88% of respondents consider unclear legal provisions as a definitely essential barrier to the development of enterprises in Poland. Subsequently, administrative requirements (87% of respondents) and lack of financial resources (86% of respondents) are considered equally harmful in this respect.

“It is indeed worrying that the catalogue of barriers to conducting business, which entrepreneurs consider the most challenging, is basically not changing,” claims Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers. “From the very beginning, the most annoying factors in view of entrepreneurs are the tax system, labour costs, bureaucracy and a complicated, unstable regulatory environment. And we must remember that micro-entrepreneurs experience these problems much more intensively than larger entities. We have published countless reports and positions on each of these topics and we see some changes going in the right direction, but it is still too little and too slow.”

64% of people asked about the most important reasons for not employing more people in small- and medium-sized enterprises pointed to the lack of financial resources, for example, too high employment costs.

Too low profits caused by the lack of financial resources are also a major obstacle for small- and medium-sized enterprises to invest their capital. As many as 48% of respondents say so.

Lack of financial resources is also perceived as the biggest obstacle at the start – almost half of Polish entrepreneurs (47%) believe that the lack of money is the main barrier to starting their own business.

Due to the fact that the above-mentioned lack of financial resources is considered by entrepreneurs to be the greatest obstacle to starting their own business, it is the state’s financial aid according to entrepreneurs (53%) that could encourage them to establishment their own businesses. Another important incentive would be an extended payment period of the preferential social security premium according to 43% of respondents.

“I would recommend the government to have a good look at this study instead of inventing ‘entrepreneur’s tests’ and limiting the possibility of making use of the flat tax rate when self-employed. Improving the business environment will serve everyone and I can guarantee that the state budget would quickly feel the results thereof,” concludes Cezary Kaźmierczak.

 

04.04.2019 Survey by the Union of Entrepreneurs and Employers: Barriers to running business activity in Poland

 

Fot. geralt/pixabay.com

Warsaw, 2^nd April 2019

Most opponents of the trade ban… in small towns and among people who work… in trade

The Maison&Partners research house carried out yet another wave of the survey commissioned by the Union of Entrepreneurs and Employers concerning the attitudes of the Polish people towards the Sunday trade ban. The general conclusions from this wave’s results remain the same as those based on previous editions of the study. Restrictions have the highest number of opponents among residents of small towns, as well as among people working presently or in the past in the trade sector.

In the latest wave of the survey, one can observe a certain increase in the percentage of respondents positively assessing the solutions from 2018, that is two trade Sundays a month. People declaring that they are assessing these regulations rather or definitely positively constitute 45% of respondents. In November 2018, there were 43% of them which means an increase of two percentage points.

“We can clearly see that people, recognising how burdensome the regulations already in force are and how annoying the total trade ban might be beginning in 2020, more favourably evaluate what was last year and that’s two trade Sundays a month,” claims Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “This is not at all surprising. In view of the most restrictive regulations that are to come into force next year, those softer restrictions look much more rational.”

The percentage of people who in any way support the solutions in force in 2019 amounts to 37% and is four percentage points lower than in the first wave of the survey, which was carried out in November 2018. The same is true of the percentage of supporters of next year’s regulations: the ban on trade on all Sundays. It comes to 32% of respondents, while in November 2018 that was 35% of respondents.

The less critical evaluation of the 2018 solutions is reflected in the number of opponents of any restrictions on trade, which has decreased somewhat. At the same time, the percentage of opponents of regulations in force in 2019 and planned for 2020 remains the same: roughly half of Poles are against these solutions. The number of supporters of the Sunday trade ban also dropped – from 31% in November 2018, to 26% in the current edition.

“As for the structure of the group of opponents of the Sunday trade ban, the trends remain unchanged,” emphasizes prof. Dominika Maison. “We still see that the percentage of people critical of the enforced regulations is higher among residents of small towns and among people working in commerce. We have noticed this since the first wave of the survey and nothing has changed in this respect in the latest edition.”

What is interesting is that the March measurement shows once again a decline in the percentage of people who consider the Sunday trade ban as one of the two best decisions of the current government. This regulation is increasingly perceived as negative in the light of other actions undertaken by the Law and Justice government.

 

02.04.2019 Survey by the Union of Entrepreneurs and Employers: Attitudes and opinions regarding the restrictions on Sunday trade – wave 4

 

Fot. brian/flickr.com

Warsaw, 19^th March 2019

 

Almost 60% of entrepreneurs against the Sunday trade ban – the most opponents among micro-enterprises

Maison & Partners carried out a survey among companies of the SME sector commissioned by the Union of Entrepreneurs and Employers analysing the impact of the Sunday trade ban on the economy.

Entrepreneurs from the SME sector are strongly divided concerning possible solutions regarding Sunday trade. Every fifth respondent supports the introduction of a total ban, equally many consider the most appropriate solution the introduction of two free Sundays a month for every employee, while almost 40% are in favour of no restrictions at all. Microbusinesses are the strongest supporters of lack of restrictions – this option was chosen by 43% of respondents from this group.

It is symptomatic that micro-enterprises are also the group that assesses the effects of the regulations introduced to limit trade on Sundays worst. Only 38% of them believe that the trade sector has not suffered from the restrictions, and exactly 40% say that the regulations have not achieved any positive effect, that is, they hit the industry hard and the employees have not been benefitted from them.

“We can clearly see here a correlation that could have been easily predicted. While larger companies somehow deal with the ban and therefore mildly evaluate its results, micro-enterprises more radically point out the negative effects of this law,” claims Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers. “We can also see that the effects of restrictions are very much criticised by representatives of the service industry, of which 66% believe that the trade sector suffered as a result of the entry into force of these regulations.”

The results of the assessment of the impact of restrictions on the situation of small stores are interesting. According to over 60% of respondents, the restrictions negatively impact the smallest entities. Interestingly, the highest percentage of respondents indicating that the situation of small stores has deteriorated is among entrepreneurs from the commercial sector (64% against 61% of respondents from the services sector and 56% from the production sector).

“We see that the highest percentage strongly agreeing with the claim that trade restrictions have a negative impact on the situation of small stores can be noticed among medium-sized and large entrepreneurs as well as micro-entrepreneurs: 35% and 34% of them, respectively,” comments prof. Dominika Maison. “At the same time, the percentage of entrepreneurs definitely disagreeing with this statement is similar everywhere and amounts to 13%-14%.”

The study shows that the SME sector generally does not support the proposals to tighten trade restrictions through, among others, a proposal to clarify the concept of a post office. As many as 55% of respondents are against this idea. The highest percentage of respondents who are against tightening the law is among micro-entrepreneurs, of which as many as 61% do not support it, 36% of whom do not support it very firmly.

“This research is another one of our publications on the impact of these harmful regulations on the economy and the situation of small businesses. We have already proven that the society does not accept increasingly restrictive regulations. In our reports, we presented statistics showing the negative effects of the trade ban. Now, the time has come for the views of entrepreneurs from the SME sector on this issue. Also in their opinion, the trade sector has suffered from the new laws. We hope that this is a sufficient signal to the government, which will persuade the cabinet to repeal this law,” sums up Cezary Kaźmierczak.

 

19.03.2019 Survey by the Union of Entrepreneurs and Employers: Entrepreneurs against Sunday trade ban

 

Fot. Alexas_Fotos/pixabay.com

Warsaw, 18^th March 2019

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE PROJECT DATED 5^th MARCH 2019 OF A ONE-OFF MONETARY BENEFIT FOR RETIREES AND PENSIONERS IN 2019

During the convention that took place at the end of February, the ruling party presented several new programme postulates, which then started to be collectively called “Kaczyński’s five”. These proposals boil down to transfers addressed to precisely selected social groups, of a social nature attractive from the point of view of the upcoming elections. These groups are: families with children, young people, people living outside larger urban centres, the elderly. We view the package of proposals presented during that convention as definitely negative. In our opinion, it does not contain any postulates constituting a stimulus for development. We see it rather as an attempt at a simple political bribery, undertaken in the tumultuous period before two election campaigns: to the European Parliament and the Polish parliament.

The aims of the presented project is to carry out the promise addressed to the last of the above-mentioned groups and that is the payment in 2019 of a one-off benefit for pensioners in the amount of PLN 1,100 gross. As it appears from the justification, the cost of this proposal will amount to almost PLN 11 billion. It is impossible to refer to the content of the project without evaluating the promise itself, because the basic function of the act is to simply be implemented. Thus, the Union of Entrepreneurs and Employers recognises the so-called “thirteenth retirement pension” as a harmful, expensive, and immoral attempt to persuade senior voters to support the ruling party during the election. This one-off benefit will not contribute to solving the structural problems stifling the Polish pension system at all that related to its pay-as-you-go nature and the terrible demographic situation.

Pursuant to the afore-mentioned factors, the Polish pension system is currently in the state of a real crisis, additionally deepened by imprudent political decisions. Lowering the retirement age led to the necessity to pay benefits to 300,000 new, additional retirees in 2018, which translated to a further cost of about PLN 7 billion. We must stress that this reform, significantly increasing the burden on the pension system, was carried out under the conditions of full awareness what the forecasts of the Social Insurance Fund had been. They show that even assuming a higher retirement age, in 2060, the group of people of working age would have shrunk from just over 63% to less than 54% of the population, whereas the percentage of people receiving benefits was expected to have increased from 18.5% up to over 30%. In conditions of lower retirement age, the situation is to be even worse – as little as 48.4% of the population in the working-age group is to pay contributions to a group of 35.8%. The result thereof? A deficit of the pension fund exceeding PLN 80 billion.

We see certain analogies between the proposal presented in the discussed project and the re-reduction of the retirement age. Both actions are of a populist nature and are irresponsible attempts to profit politically in the short-term from the satisfaction of the “recipient group” – be it the possibility of earlier benefits or a one-off payment in cash – regardless of both long- and short-term economic consequences. We believe that proposals such as this one-off payment of an additional benefit are almost outrageous in a situation where no concept of systemic pension reform has been announced that would address the challenges and risks that are publicly known.

The very content of the legal act sent for consultation is a source considerable astonishment. It is not a standard solution when justifying the need to introduce a given law to refer already in the first sentences to the party convention (sic!) and to the need to fulfil the promises that were made during it. The content of the following sentences rather matches pre-election media messages than argumentation to a draft normative act. A number of measures undertaken by the government were named whose aim was to improve the financial situation of the poorest care beneficiaries, citing, among others, the increase of the lowest pension or higher benefit indexation. Not a single sentence can be found in the justification containing any argument whatsoever in favour of the project being approved in the form presented. No data was provided indicating the need to pay out such a benefit. On the contrary, for the greater part of the “substantive” justification, the legislator recited government measures whose consequence were pension increases. At the end, it was concluded that the payment of a one-off benefit “will meet the expectations of the majority of pensioners”. Admittedly, it is a shockingly concise justification for the necessity of introducing a solution costing the budget as much as PLN 11 billion. In practice, therefore, the social partners have no way of addressing any argument for passing the bill, because no such argument has been made – neither in the project’s justification nor in its impact assessment.

The “thirteenth retirement pension” will not contribute to improving the financial situation of pensioners. A one-time benefit will be an attractive “gift” for voters, but in a time perspective longer than one month, it will not affect their situation in any way. The presented project, aimed solely at the fulfilment of a one-time financial pre-election promise, seems to be completely irresponsible. In connection with the above, we evaluate it negatively, once again calling for proper debate about the future of the pension system and its final shape.

 

18.03.2019 Position of the Union of Entrepreneurs and Employers on a one-off monetary benefit for retirees and pensioners in 2019

 

Fot. Alexas_Fotos/pixabay.com

Warsaw, 12^th March 2019

 

Over 500 small shops owners appeal to the Prime Minister to withdraw from Sunday trade restrictions

 

On 12^th March 2019, a petition was submitted to the Chancellery of the Prime Minister of the Republic of Poland regarding the abolition of the Act on trade restrictions on Sundays and certain holidays, and introducing changes to the Labour Code guaranteeing each employee two free Sundays a month. The petition was signed by Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers, Jerzy Romański, president of the Polish Federation of Merchants and Producers Associations, as well as over five hundred owners of small family stores.

The petition calls attention to both the express mode of adopting the Act on Sunday trade restrictions and the lack of a reliable assessment of the effects of regulation, and the negative effects of the introduced regulations. Over the first year of the Act being in force, an many as 16 thousand small family stores were closed – stores that the new regulations were supposed to help. Moreover, the social acceptance of the introduced regulations is decreasing. Along with the gradual decrease in the number of commercial Sundays per the month, the percentage of opponents of the Sunday trading ban increases.

“Many times, after we presented hard statistical data clearly showing that the Sunday trade ban is killing small stores, we would hear “argumentation” based on anecdotal evidence,” says Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers. “People would talk about brothers-in-law, cousins or neighbours who allegedly run small shops and praise the trade ban. This was supposed to be a counterargument against the statistics that were crushing to the enforced regulations. Therefore, if widely available data are still unconvincing, we have decided to collect signatures for a petition to the Prime Minister, in which we call for this harmful act to be repealed. There are more than five hundred of them, a solid, representative group of owners of the smallest stores, not anonymous individuals. They clearly say that the ban is harmful to their businesses and they ask for it to be abolished.”

The petition also points to a solution which, in the opinion of its signatories, would be much more optimal than restrictions on Sunday trade, i.e. the introduction of a guarantee of two free Sundays each month for all employees working under a contract of employment. This way, the legislator’s original goal could be achieved without excessive interference in the market or in the functioning of entrepreneurs. The advantage of this solution is also that it would be commonplace and would cover all employees, not just those employed in a part of the commercial sector.

“We really see and experience how extremely harmful the Sunday trade ban is for owners of small Polish shops,” claims Jerzy Romański, president of the Polish Federation of Merchants and Producers Associations. “This petition is a cry of despair. The smallest entrepreneurs from the commercial sector appeal to the Prime Minister to abolish the regulations that lead to their bankruptcies. I deeply hope that they will be heard.”

 

Petycja w sprawie zniesienia Ustawy o ograniczeniu handlu w niedzielę a także wprowadzenie zmian w Kodeksie Pracy, które zagwarantują każdemu pracownikowi 2 niedziele wolne w miesiącu.