August 2^nd. 2018

 

A new employers’ union hass formed – the Union of Agricultural Entrepreneurs. On August 1^st this year in Biała Podlaska, several dozen large Polish agricultural entrepreneurs met and elected their Organisational Committee comprising of 12 members. The Committee will deal with the Union’s registration. During the meeting, apart from organisational issues, legal problems in the field of development of agricultural enterprises and agricultural production, issues of international competition and changes taking place in the Polish countryside were discussed.

This is a fragment of a speech by Cezary Kaźmierczak, the President of the Union of Entrepreneurs and Employers at the founders’ meeting:

“There are great challenges ahead of Polish agriculture. We are dealing with a series of events and processes for which we must prepare to adequately respond. The most important challenges facing Polish agriculture are problems with farm succession and growing competition from Ukraine. We are just at the threshold of these two phenomena. They will intensify and unless we react properly, they will threaten Polish agriculture.

Poland owes a lot to small family farms. During the communist period, these were oases of tradition, work culture, entrepreneurship and common sense. To a large extent thanks to those values that survived in the countryside, it was possible for Polish entrepreneurship to explode after the collapse of communism. The time of these farms as a model of farming is slowly passing. Both due to lack of succession and powerful competition.

This competition comes mainly from Ukraine, where giant agricultural enterprises (“agrozavods”) are created, covering up to tens of thousands of hectares, based on oligarchic money, western technologies, cheap labour and excellent soil. Small Polish farms are not and will not be able to compete with the Ukrainian “agrozavods”.

I remind you that the way of Ukrainian agricultural products to the European Union is open.

However, we have not yet lost. We only need to create competitive Polish “agrozavods”, that is Polish agricultural enterprises, as a response to Ukrainian ”agrozavods”. We have many competitive advantages, including broader experience, greater work culture, a better understanding of sales markets, we are more entrepreneurial. All that is needed is a political decision to change the model of Polish agriculture – we must leave the preference for small family farms that are in decline and invest in Polish agricultural entrepreneurs.

To achieve this, we need a whole system of support, from a favourable legal system for a new order in the countryside, to loans guaranteed by the government for the development of agricultural enterprises.

The second area where we can compete is unprocessed and processed high-quality and highest-quality food. We have a decisive advantage here and we should take action to strengthen it.

I repeat – without strong support for the production of high-quality food or without a systemic support for shaping a new order in the countryside, based on efficient, private agricultural enterprises – Polish agriculture may not survive.” – in these words, Cezary Kaźmierczak ended his speech.

Warsaw, July 31^st, 2018

 

An appeal to the government of the Republic of Poland regarding the maintenance of the upper limit for the basis of social security contributions
(the thirty-fold rule)

 

Taking into consideration:

• the controversy caused by the proceedings of the Act of December 15^th, 2017 amending the Act on the social security system and other acts abolishing the thirty-fold rule,
• the dismissal by the Constitutional Tribunal of the hearing on the examination of the compliance of the Act with the Constitution of the Republic of Poland and the still unknown date of the recognition of the application of the President of the Republic of Poland,
• the uncertainty regarding the legal status, and subsequent legislative initiatives increasing the costs of employers’ activities, limiting the possibilities of new investments by entrepreneurs,,
• the goals of the government’s Responsible Development Strategy, which assume the creation of high-quality and highly-paid jobs in our country,
• the increased in labour costs of high-class specialists, which reduce our country’s attractiveness as a place to create innovative jobs,
• the lack of initiatives that increase the attractiveness of employment contracts in relation to other forms of employment,
• the finalisation of budgets preparation by entrepreneurs for the year 2019.

we postulate that the government commits to maintain the upper limit of the basis for social security contributions, at least until the year 2020, and to engage in argumentative talks with social partners.

 

The appeal has been signed by:

• Konfederacja Lewiatan – Polish Confederation Lewiatan
• Pracodawcy RP – Employers of Poland
• Business Centre Club
• Związek Rzemiosła Polskiego – Polish Craft Association
• Związek Przedsiębiorców i Pracodawców – Union of Entrepreneurs and Employers
• Polski Związek Pracodawców Przemysłu Farmaceutycznego – Polish Association of Pharmaceutical Employers
• Polska Rada Centrów Handlowych – Polish Council of Shopping Centers
• Związek Pracodawców Technologii Cyfrowych Lewiatan – Digital Technology Employers Lewiatan
• Związek Pracodawców Firm Produkcyjnych – Association of Employers of Production Companies
• Transport i Logistyka Polska – Transport and Logistics Poland
• Polskie Forum HR – Polish HR Forum
• Związek Pracodawców Prywatnych Mediów – Association of Private Media Employers
• Związek Pracodawców Motoryzacji i Artykułów Przemysłowych – Association of Employers of Automotive and Industrial Goods
• Izba Gospodarki Elektronicznej – Chamber of Digital Economy
• Związek Pracodawców Sektora Kosmicznego – Polish Space Industry Association
• Polska Organizacja Handlu i Dystrybucji – Polish Organisation for Trade and Distribution
• Federacja Przedsiębiorców Polskich – Federation of Polish Entrepreneurs
• Związek Pracodawców Branży Infrastruktury – Association of Infrastructure Industry Employers
• Polskie Stowarzyszenie Sprzedaży Bezpośredniej – Polish Direct Sales Association
• Związek Pracodawców Branżowych – Association of Industry Employers
• Polska Izba Gospodarcza Czystości – Polish Cleaning Chamber of Commerce
• IAB Polska – IAB Poland
• Polska Izba Informatyki i Telekomunikacji – Polish Chamber of Information Technology and Telecommunications
• Związek Przedsiębiorców Przemysłu Mody Lewiatan – Association of Fashion Industry Entrepreneurs Lewiatan
• Rada Podatkowa Lewiatan – Tax Council Lewiatan
• Polski Związek Przemysłu Kosmetycznego – Polish Association of Cosmetics Industry
• Związek Pracodawców Producentów Materiałów dla Budownictwa – Building Materials Manufacturers Employers Association
• Związek Pracodawców Hoteli, Restauracji i Cateringu – Association of Employers HoReCa
• Polska Unia Szpitali Specjalistycznych – Polish Union of Specialist Hospitals
• Związek Pracodawców Prywatnych Energetyki – Association of Private Energy Employers
• ABSL – Association of Business Service Leaders
• Stowarzyszenie Energii Odnawialnej – Renewable Energy Association
• Stowarzyszenie na rzecz systemów ociepleń – Association for Thermal Insulation Systems
• STRATERA MED

 

The appeal together with the list of signing parties was sent to Mateusz Morawiecki, the Prime Minister of the Republic of Poland, and Elżbieta Rafalska, Minister of Labour and Social Policy, President of the Social Dialogue Council.

The list of signing parties is still open and we encourage other organisations to join the initiative.
More information

Organisations that would like to express their support for the appeal are asked to contact Maciej Drozd: mdrozd@konfederacjalewiatan.pl.

Warsaw, 17^th July 2018

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE DRAFT ACT ON THE
LABOUR MARKET OF 29^TH JUNE 2018

The Union of Entrepreneurs and Employers has repeatedly highlighted the necessity to introduce far-reaching changes in the rules and regulations of employing foreigners in Poland. This need stems from at least two factors – the first being the current deficit of people of working age which presents an undesirable situation for entrepreneurs, i.e. lack of hands to work. The shortage of qualified employees at the moment is one of the major obstacles to the development of companies – including those from the SME sector. The second aspect that needs to be considered is the fatal demographic situation of Poland in the long run. This problem is already manifested by the above-mentioned deficits on the market, but within several dozen years, it will take on a much more serious dimension.

A small number of working people will have a negative impact on the condition of the state budget, it will have a fatal influence on the pace of the country’s economic development and may ultimately lead to the collapse of the pension system. That is why it is vital to supplement the shortages that have already been created during the many years when the fertility rate in Poland did not ensure a simple replacement of generations.

An important element of the plan to prevent the long-term effects of this demographic disaster must of course begin with a wise and properly targeted pro-family policy that rewards having more than two children. The resulting “gap” cannot be supplemented, however, only with new births – according to available estimates, to maintain the pace of economic development, by 2050 we will need at least 5 million economic migrants. Immigration is currently a very touchy topic in Europe due to the so-called immigration crisis caused by an unreasonable “open door” policy for all visitors from the Middle East and Africa. As a result, a large part of Western European countries has brought about a situation in which their spending on social benefits regularly increases to horrendous proportions, while they do not receive an appropriate added value in return. Poland, being a country still economically catching up with the broadly understood West, should learn from the mistakes of its wealthier partners. Thus, we must not duplicate the immigration policy of Germany or France. We should benefit from the large resources of employees willing to take up employment in Poland from culturally approximate countries, or those who, as ethnic groups, during their many years of residency in the country undertook economic activity, and worked in a broader, statistically valid sense, while not generating neither criminal problems nor excessive social spending (e.g. the Vietnamese).

The rules and regulations of employing foreigners in Poland constitute a very important element of immigration policy in the economic context. The Union of Entrepreneurs and Employers has repeatedly advocated simplifying and liberalising the rules of employment of foreigners in Poland. Thus, we generally consider the draft law on the labour market as a step in the right direction. At the same time, we stress the fact that the proposed solutions are still insufficient, and it is necessary to undertake bolder actions.

Strong support should be given to the requirement that the work of a foreigner without a permit, on the basis of a declaration of intention to perform work for a foreigner, should be possible not for six months within a 12-month-long period, as is currently the case, but for 12 months within an 18-month-long period. Consequently, foreigners from selected countries (mainly from Ukraine) will have the opportunity to work in Poland for a whole year with a subsequent six-month break. In general, we acknowledge the system of declarations of intent to entrust work to a foreigner as optimal (although already to some extent complicated by recent changes –the earlier system was simpler and more informal), therefore a proposal to extend the time when a foreigner can work on the basis thereof, we definitely support, although we believe that a forced break from work on the basis of the statement makes no sense and one ought to have the possibility to continually prolong the declarations.

At the same time, a few changes to the system of declarations are introduced that require clarification. For example, Art. 298 sec. 8 of the Act granting the staroste (poviat authority) the right to issue a decision on the annulment of the entry of the statement on entrusting work to a foreigner in the record of statements, including “if the Polish employer does not conduct activities justifying the entrustment of work to a foreigner”. Admittedly, the premise is further specified by indicating that it is “in particular” a situation in which the employer does not conduct business, statutory or agricultural activity or its activity is in liquidation or suspension period. The catalogue mentioned by the legislator is not closed, however, and there is a risk of an expanded interpretation of this provision, in which the staroste could state that the Polish employer does not conduct any activity justifying the entrustment of work to a foreigner and make the entry of the statement in the register null and void. It would therefore be worth making the catalogue referred to in Art. 298 sec. 8 point 2, a closed catalogue of premises whereby the staroste could issue a decision on cancellation of the entry of the declaration to the register.

At the same time, we draw attention to the provisions facilitating citizens of culturally approximate countries their settlement in Poland. While the postulate itself should be commended, because we ultimately want economic immigrants, who are willing to take up jobs and contribute to the Polish economy, to stay in our country for a longer time, we do have serious doubts concerning the limiting those facilitations to people “possessing qualifications in professions desired for the Polish economy”. Bureaucratic determination of “professions desired for the Polish economy” will never keep up with the market or reflect its real, contemporary needs. Therefore, while we are definitely in favour of facilitations, we postulate the resignation from the criterion of having qualifications in some specific professions. From behind an official desk, it will never be possible to accurately diagnose employees of which professions and how many of them exactly does the Polish economy need at any given moment, especially that in the current realities and at the current pace of technological progress this can change very rapidly.

At the same time, we wish to point out that the draft bill did not address a number of our demands, which were raised often on the occasion of previous discussions regarding the issue of employing foreigners in Poland. Among others, not ascribing declarations and work permits to a specific employer, so that the documents would constitute entitlement to work on the territory of the Republic of Poland and not the fact of being assigned to a specific entity. This way, we will enable immigrants to adapt to the rapidly changing realities of the labour market.

To summarise, the presented draft bill is definitely a step in the right direction, albeit an insufficient one and in a few aspects deficiently precise. We postulate further works be undertaken concerning this project and that our comments presented in the official position above be taken into account.

Union of Entrepreneurs and Employers

 

fot. 13on / on lic. Unsplash

Warsaw, 5^th July 2018

5POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE TERMINATION OF THE TERM OF OFFICE OF THE FIRST PRESIDENT OF THE SUPREME COURT

As long as politicians accuse each other, as long as they maintain that it is them and not the other party who have an idea for Poland, and who convince to the solutions they propose – atypical and radical as they may be – we are witness to a normal discourse that does not significantly diverge from the standards adopted in other countries in the world.

There are, however, some dimensions of the functioning of the state, which due to the raison d’etat should be removed from the rules of a brutal political dispute, within which it is allowed to do and say almost everything.

One of these dimensions is the judiciary, which in the state of law performs at least two roles. First, it serves the peaceful resolution of disputes, and secondly – as part of the classical division of power – protects citizens from the legislative and, most importantly, executive power, especially in a system, in which these two authorities penetrate each other.

For this reason, the Union of Entrepreneurs and Employers criticises the shortening of the term of office of the First President of the Supreme Court, which is discordant with the provisions of the Constitution.

The Supreme Court, which seems to many people an institution terribly distant from the life of an average person, has a strictly defined scope of competence. Both in the old Act of 23^rd November 2002 and in the new Act of 8^th December 2017, these competences include the administration of justice by supervising the legality of the judgments of common and military courts. Within these competences, the Supreme Court has settled many legal disputes vital from the point of view of various social groups in matters concerning everyday life of average citizens. In recent years, after the political changes that took place in 2015, by virtue of the resolution of 22^nd June 2017, the Court confirmed the permissibility of disposing of agricultural property to a relative, even before the end of the 10-year period since its acquisition. On 25^th August 2017, it adopted a resolution that the right to separate ownership of premises located in a building located on real estate, for which perpetual usufruct right has been established, does not expire upon the expiry of the period for which such right was established. This year, the Court stated that when assessing whether a given contractual term is allowed, one should take into account the state at the time of conclusion of the contract, without the need to investigate whether any damages resulted from the use of an unlawful clause – which is essential from the point of view of Swiss franc borrowers. Therefore, the Supreme Court should be considered an institution that is of paramount important to the Polish economic system. Henceforth, one cannot refrain from reacting when the principles of functioning of the Supreme Court provided in the Constitution are violated, because it raises serious concerns as to whether the next step will be interference with its jurisdiction.

According to Art. 183 sec. 3 of the Constitution, the First President of the Supreme Court is appointed by the President of the Republic of Poland for a six-year term from amongst the candidates presented by the General Assembly of the Judges of the Supreme Court. The duration of the term of office of the First President is therefore explicitly stated in the Constitution. Article 180 sec. 1 of the Constitution also states that the judges are not removable. It is impossible not to notice that the theoretical gate to circumvent this provision is sec. 4 of the same article, according to which an act defines the age limit, after which the judges retire. Therefore, a judge cannot be removed theoretically, but it is possible – by means of an ordinary act, voted by a simple majority – to manipulate the age limit, after which a judge will retire by virtue of the law.

Repeatedly criticised by the Union of Entrepreneurs and Employers, the imprecision of the literal provisions of the Constitution must not be used to violate the principles that are not only the principles of the Polish Constitution, but an element of the legal culture of our entire civilisation. There is no doubt that the possibility of determining the age limit of “retirement” must not in any way affect the term and irremovability of the First President of the Supreme Court (just like the President of the Supreme Administrative Court). The duration of the term of office of the First President is specified in the Constitution very precisely, the legislator has not decided to include in the provision a reference to a specific law that would define the terms of retirement – as is the case of retirement age of judges.

In the “old” Act on the Supreme Court, the legislator in Art. 10, in relation to constitutional regulations, narrowed the group of persons who may become the First President of the Supreme Court – the Constitution says that the President appoints the First President from among the candidates presented by the General Assembly of the Supreme Court Judges, while the Act states that the Polish President appoints the First President from among the judges of the Supreme Court in an active state. In the “new” law on the Supreme Court, the procedure was made precise even further – it was specified that the General Assembly of Supreme Court Judges may submit five candidates selected from among the judges of the Supreme Court in the active state. At the same time, it was supplemented that the First President may only be appointed once, and the position may be taken only until the state of retirement, being retired or the end of term. Thus, the Act defines the conditions for terminating the term of office, the duration of which – without exceptions or delegations to determine them in statutory mode – is provided for in the Constitution.

There can be no doubt that the confusion around the Supreme Court would not have occurred if the Polish Constitution had been written in a logical, understandable, and unambiguous manner. This is not the case, however, and unless a new Constitution is adopted, we must rely on the goodwill of those who make use of its provisions. Unfortunately, as the history of the proceedings of the new law on the Supreme Court clearly show together with the shape of the adopted regulations and the subsequent conduct of the authorities, one cannot really speak of goodwill in this case. From the very beginning, the undisguised goal was to get past (or even break) the provisions of the Constitution and to terminate the term of office of the First President of the Supreme Court by retiring the person in question.

The Union of Entrepreneurs and Employers criticises the actions of the legislator, the government, and the president in relation to the Supreme Court and draws attention to the fact that the credibility of the judiciary is one of the key conditions for conducting business in Poland, which is taken into account by both foreign investors and Polish entrepreneurs in making investment decisions. The condition of the Polish judiciary will have an impact on the economic situation and budget results, i.e. factors that allow the current government to carry out some of the amendments. By undertaking such controversial actions, the authorities contribute to the perversion of the rule of law, which – as the latest history of political culture in our country shows – will be a process deepened by successive administrations, which are equipped with an excellent excuse to creatively interpret the Constitution in a spirit coincident with their own, current political interest.

The Union of Entrepreneurs and Employers has repeatedly emphasised the need to urgently reform the judiciary, but we must not accept a situation in which this reform has an almost exclusively personal dimension. For entrepreneurs, the political views of adjudicators are not important – as long as they leave them outside the courtroom. The key is that the economic dispute be settled as quickly as possible. We are still counting on a real change of the system, one that serves Poland, the justice system itself, as well as the citizens and entrepreneurs seeking in courts protection of their rights.

Union of Entrepreneurs and Employers

Warsaw, 3rd July 2018

Polish entrepreneurs against the tax on links and network filtering

Representatives of the largest Polish unions of entrepreneurs and associations representing companies from the modern technology, digital and internet sectors jointly appealed to Polish MEPs that they reject the draft EU Copyright Directive in its current form, which will cause damages, among others, to Polish companies, scientists, and Internet users. They also turned to Polish Prime Minister Mateusz Morawiecki for support in this matter. The Polish Consumer Federation has also voice its concerns over certain draft regulations.

 

As it was emphasised in the joint letter – signed by the Union of Entrepreneurs and Employers, the National Chamber of Commerce, the Union of Digital Technology Employers Lewiatan, Polish Digital Association, Centrum Cyfrowe Foundation and Startup Poland – the adoption of the EU Copyright Directive in its current form will negatively affect the competitiveness of the entire the sector related to modern technologies, which will also impact Polish consumers. “That is why it is in our common interest that the Internet, which plays a fundamental role in the digital economy, remained open and accessible to all. Any attempts to artificially restrict access to content will affect the development of innovation,” it was stressed.

No to link tax

According to entrepreneurs, the idea of introducing provisions on content licencing through the so-called “link tax” in Art. 11 of the Directive is the wrong thing to do. Because, as they argue, publishers are now sufficiently protected by applicable copyright laws. “From German and Spanish experiences, it is clear that from an economic point of view the concept of charging for linking does not make sense and will not bring any income to publishers, but it will lead to closing of access paths to information that are convenient for users, as well as to the ruin of small, local, and specialist publishers who rely on aggregators, social media, and search engines as sources of traffic generating income from advertising,” they explain. And they metaphorically ring the alarm that the right to free competition will also be in question, because provisions in such wording will actually only favour the largest of publishers. “The future of smaller publishing houses and journalistic initiatives or start-ups, which will not be able to obtain all the licences – from large publishers – necessary to exist on the market will be threatened,” emphasised the signatories of the letter.

Not to the obligation to filter content

Also Art. 13 of the Directive, which introduces the obligation to filter the Internet to protect copyright, as well as the legal liability of internet service providers for the content of posting by their users, raises their objections. As they explain, such rules will cause unpredictable consequences and damages for innovative undertakings functioning on the Web as well as the entire e-commerce market. Internet service providers will be obliged to introduce special filters in order to avoid the possible consequences for possible infringement of copyright. This would not only affect the smallest entities again, but it is contrary to the Charter of Fundamental Rights, as it hinders the operation of one’s own business, as well as restricts freedom of speech of consumers themselves. “It can be assumed in advance that excessive caution of publishers would even result in censorship. This is contrary to the values of the European Union, which was to be open to citizens and whose one of the basic assumptions was the development of an information society and the competitiveness of European industry and culture,” it was cited in the letter.

No to data flow limits

The proposed form of copyright in the Digital Single Market in accordance with the provisions of Art. 3 of the draft Directive, according to entrepreneurs, will threaten to block progress in the field of data flow and use of data (text and data mining; TDM). “The introduction of an exception to the free practice of TDM only for some researchers, in particular, will hit Poland, which is the country of choice for international concerns to locate their R&D centres. We express our concerns that the introduction of new provisions in such a limited form will result in the transfer of these centres from Poland to other countries outside the European Union,” they warned.

The Polish Consumer Federation concerned about the possible limitation of access to information

The Polish Consumer Federation also raises objections to the EU Directive, which expressed its concern in the letter sent to MEPs about the effects of the proposed Directive. And especially resulting from the introduction of provisions of Art. 11 and Art. 13: “We are concerned that the new regulations will significantly limit access to information on the Web, prevent the freedom to share them, which will undermine the foundations of a modern information society,” stated the Consumer Federation and appealed to Polish representatives in the European Parliament for a deliberate decision in the vote over the Directive.

27.06.2018

 

Let us allow the market to save our children’s education and place Polish schools at the global forefront. The Warsaw Enterprise Institute and the Union of Entrepreneurs and Employers present the report “School for life. Who will pay for our pensions?” The study under the direction of Professor Krzysztof Konarzewski includes recommendations for changes in all key areas of education: the curriculum, school system, management, and financing.

If Polish schools are to respond to the challenges of the changing world and Poles themselves are to achieve the same level of life as the richest nations, then the education system must undergo profound transformations. We must give schools greater financial independence, empower parents and the local communities, in particular local entrepreneurs, at the expense of supervision by central state institutions and municipalities. Without the introduction of elements of hard competitiveness and market mechanisms, we will never provide our children with education at the level of the fastest developing countries.

Occasional curriculum changes and arbitrary ministerial decisions should be replaced by systematic work on improving core curricula and school textbooks using new ideas and empirical data. Such continuity of work may be legally ensured by a Program Board assisting the Minister of National Education.

Polish schools need more independence and space for creative development of the youth. Key decisions regarding the didactic offer, education, equipment, and employment of teachers are made today outside the school – mostly in local or municipal education departments, which divide educational subsidies, curators and the Ministry of Education, which meticulously regulates every aspect of the schools’ activity. Nobody takes into account the specifics of each school, the differences between pupils and the development potential of given teaching staff.

We recommend:

1. Schools should no longer bed manage by local government entities, but by not-for-profit companies with their own budget and supervisory board. The company operating a school should be selected by the local government by way of public procurement. After the tender is resolved, the local government should conclude a contract with the company to run the facility.
2. A thorough change in the financing system. The school budget should consist of: a subsidy paid by the local government, grants and donations from other sources, as well as revenue from the school’s own activity. The local government would remain the owner of the educational real estate and would be obliged to keep them in proper condition.
3. Appointment of the Program Board at the Ministry of National Education, the tasks of which would include designing changes to the curriculum, analysing the results of school performance, and recommending textbooks deserving admission for school use.
4. Establishing a school supervisory board with representatives of teachers, parents, local entrepreneurs, non-governmental organisations, foundations, a university that examines the effects of teaching, sets new goals and directs changes in order to bring the school closer to local expectations, as modelled on England, Wales, and Northern Ireland.
5. Polish school should teach and demand a lot more practical skills, while resigning from excessive theoretical content. The widespread use of information technology in teaching and learning of individual subjects is also crucial.
6. Breaking with outdated and ineffective methods of working during lessons, using methods activating the pupils’ intelligence.

27^th June 2018 Agenda Poland: School for life. Who will pay for our pensions?

***

The report was created as part of the “Agenda Poland” project, a joint venture of the Warsaw Enterprise Institute and the Union of Entrepreneurs and Employers, whose aim is to prepare a strategy for Poland’s development, systemic solutions, and improvement of the law in selected areas.

 

Photo. Alexas_Fotos / on lic. pixabay

19.06.2018

 

According to the report by the Union of Entrepreneurs and Employers under the title “Financing of Business in Poland”, the major way how enterprises invest in themselves is using their own funds. These include both savings from the profits made in previous years as well as the currently allocated funds. According to the available data, as many as 62% of companies from the SME sector finance their development from their own resources.

The Union of Entrepreneurs and Employers published its second report on financing of business in Poland. The subject matter is important, because it determines the level of investments made by enterprises for their very own development and modernisation of their activities. And investments obviously are necessary to maintain economic growth.

“It’s as clear as day that Polish entrepreneurs from the SME sector finance their activities primarily from their own funds,” says Cezary Kaźmierczak, President of the Union. “Fears of making serious commitments are understandable, but it seems that carrying out really large investments can’t be done without using external financial sources. That is why an appropriately tailored offer and lack of obstacles created by the legislator are such important factors for the development of Polish companies.”

The so-called external sources of financing, among which one can distinguish returnable and non-returnable funds, are beginning to play a relatively small, though growing role.

Bank loans are considered the main returnable source of finance. On the flipside, non-repayable funds include subsidies, grants, and money from earmarked funds of the European Union. Especially the last option seems to be very attractive. Only that only a small percentage of entrepreneurs believe that it is relatively easy to obtain them. As many as 43% are of the opinion that the procedure for applying for them is definitely too complicated. And among entrepreneurs who did not receive financing, although they applied for it, 72% were dissatisfied with the procedures.

The report clearly states that it would be advisable that the process of applying for subsidies from European funds could be simplified to the maximum extent. On the other hand, it has to be taken into account that the institutions that grant funds want to have control how the money is spent, hence they demand detailed reports on expenditure. A reasonable compromise would therefore be needed between the expectations of entrepreneurs and the need for supervision.

“On the one hand, there is a situation in which subsidies are granted for very dubious projects, yet on the other, complicated procedures are still a key obstacle to the use of EU funds by SMEs,” claims Jakub Bińkowski, the Union’s Law and Legislation Department Secretary.

An important, though still marginally used option of financing development and investment are bank loans already mentioned earlier. A review of credit offers of individual banks indicates that the offer is rich and diverse. It seems, however, that entrepreneurs are still very cautious about making serious commitments.

It should be noted that various forms of leasing are becoming increasingly popular among entrepreneurs. According to the data of the Polish Leasing Association, in 2017, leasing companies financed assets worth PLN 67.8 billion, and as many as 71% of entities that benefited from them were micro and small enterprises. In the first quarter of 2018, there was a dynamic increase in the use of leasing, amounting to as much as 20.9%. The majority of assets financed were vehicles and heavy transport, as well as machinery and equipment. Therefore, it seems that the leasing industry has a promising development prospect, despite the fact that as many as 52% of entrepreneurs declare that they have not used leasing so far and that they have no such intention in the nearest future.

Finally, one ought to mention a relatively rarely used option – factoring. Its popularity is gradually growing, although only 14% of entrepreneurs from the SME sector made use of it last year. It has the advantage of solving one of the main problems in running a business, namely eliminating payment blockages, which as many as 81% of micro, small and medium enterprises are struggling with. In 2017, factoring companies purchased receivables for a total amount of PLN 185 billion, which is quite a lot.

19^th June 2018 Report of the Union of Entrepreneurs and Employers: Financing of Business in Poland.

 

Photo. Helloquence / on lic. Unsplash

Warsaw, 15th June 2018

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE PROPOSED AMENDMENT TO THE PROVISIONS ON LEASING OF PASSENGER CARS

 

On 13^th June 2018, the Polish Ministry of Finance published a communiqué in which it outlined a number of tax changes planned for the coming months. The vast majority of these changes are a source of optimism –inter alia, the unification of the VAT rate matrix (the employers’ associations have been asking for such an amendment for a long time – it is necessary to end the absurd multiplication of rates for analogical products), the creation of a new Tax Ordinance Act, or the reduction of the number of reporting and information obligations that entrepreneurs are subject to. Unfortunately, it seems that the Ministry has decided to use these – undoubtedly deserving of support – announcements in order to “smuggle” among them changes that make car leasing completely unprofitable. The Union of Entrepreneurs and Employers anxiously analyses this concept and evaluates it definitely negatively.

In 2017, over 480,000 new passenger cars were sold in Poland. The increase in the number of cars sold in recent years may astonish – still in 2015, dealers were happy to exceed the barrier of 400,000 units sold, while in 2013, which was then the best in a long time, 331 thousand passenger cars were sold. Thus, in four years the number of new cars sold increased by 50%. There is no doubt, therefore, that the dynamics of market growth are powerful – they are connected both with the gradual gentrification, people more and more often decide to buy a new car from an official dealership, and – as is the case of entrepreneurs – with advantageous offers that allow car financing in a different way than purchase, such as leasing.

Regulations that are in force so far made the operating leasing of a car a very favourable solution for the lessee – the leasing instalment could be included in the costs of obtaining revenue without any limitations. Thus, car leasing was much more cost-effective than buying a car, because in the latter case it was possible to take advantage of depreciation charges included in tax deductible costs, limited to the equivalent of EUR 20,000. This way, the legislator encouraged entrepreneurs to lease, which meant that they would more willingly decide to get a new car, without having to spend a large sum of money, which they could use in a different way. Such a system was beneficial in fact for all market participants – new cars found their new owners, entrepreneurs enjoyed an increasingly modern fleet, and at the same time the money they would have to spend on buying new cars, was still at their disposal, so they could decide on other investments.

The proposal of the Ministry of Finance assumes a radical break with the above-described state of affairs. The Ministry proposes that several steps be taken:

• raising the tax allowance for depreciation by less than PLN 70,000 up to PLN 150,000;
• introduction of a limit to classify lease instalments as tax costs in the amount of PLN 150,000;
• introduction of a limit to include both lease instalments and depreciation charges in the tax costs if the car is purchased, using cars for mixed purposes (i.e. not only related to business activities) up to 50% of the car’s value.

To summarise, the legislator plans to equalise the tax effects of leasing a car with the effects of buying a new car by setting an upper limit of PLN 150,000 in both cases, while limiting up to 50% of the value of the car, the possibility of including instalments and write-offs in the costs of running a business in the event that the car is used not only for business purposes. Thus, not only the lessees, who will not be able to include in their costs the entirety of leasing instalments, will lose significantly, but also those who plan to purchase a car of a value not exceeding approx. PLN 170,000 and use it not only for business purposes. Since until now when buying a car for PLN 150,000, they could include depreciation write-offs up to PLN 86,000 in their costs. When the discussed changes come into force, they will be able to use write-offs only up to the amount of PLN 75,000 (half of the car’s value). In the same case, the lessees can now include all instalments in their costs, and after the changes, they will also be limited to PLN 75,000, i.e. the sum that can be included in costs, will be reduced by as much as half.

The proposed system significantly rewards the purchase of more expensive cars – up to PLN 300,000. In this case, an entrepreneur purchasing a car can count on the cost of depreciation write-offs up to PLN 150,000, that is almost twice as much as it is possible at the moment.

We believe that the proposed model is extremely unfair and detrimental to all market users. It remains a mystery why the Ministry of Finance decided to hinder such a dynamically growing segment of new car sales. Indeed, not only entrepreneurs (both those who sell cars and those who later use them) gain from it, but so does the state – due to the revenues from VAT, excise and other taxes. We believe that the proposal is completely absurd. One can even call it a sabotage of a thriving and dynamically developing industry. There are no rational arguments justifying the introduction of solutions proposed by the Ministry of Finance. We appeal, therefore, to withdraw from these harmful proposals and allow Poles to drive new cars – after all, the government seems to care for clean air, and there is no doubt that those are new vehicles that are low-emission ones, rather than the older ones.

 

The Union of Entrepreneurs and Employers

 

Photo: Connor Lunsford / on lic. Unsplash

11.06.2018

 

On 7^th June 2018, as part of the EU Sustainable Energy Week, a conference under the title “Shaping an integrated market with hot findings and cool solutions” took place co-organised by the National Fund for Environmental Protection and Water Management and the Union of Entrepreneurs and Employers.

Among the topics discussed during this year’s EU Sustainable Energy Week (4^th-8^th June), whose motto is Lead the Clean Energy Transition, were the necessary changes in the supply of electricity, heat and cold at the local, national, and also the entire Community levels. The National Fund for Environmental Protection and Water Management, the Union of Entrepreneurs and Employers, the Katholieke Universiteit Leuven, and the Aalborg University jointly organised the “Shaping an integrated market with hot findings and cool solutions” session and debate dedicated to the possibilities of energy saving in construction through deep thermo-modernisation, the analysis of the current situation in the heating sector, taking into account Poland’s specific situation, as well as to innovative European projects in this field.

The following panellists participated in the debate: Maciej Mijakowski from the Warsaw University of Technology, Christian Schnell from the Union of Entrepreneurs and Employers, Thomas Nowak from the European Heat Pump Association, Philip Geyer from the Katholieke Universiteit Leuven, during which they presented the energy saving potential, as well as barriers related to the use of the latest technologies and thermo-modernization of buildings. When choosing optimal solutions, especially at the national level, many environmental, economic, and social factors should be carefully considered, including the risk of energy poverty.

Brian Vad Mathiesen from the Aalborg University emphasised that energy efficiency should be a priority that does not contradict the development of efficient district heating systems.

When summarising the session, Paul Hodson, head of the energy efficiency department at the European Commission’s Directorate-General for Energy, drew attention to a very important role in shaping integrated electricity and heat markets not only by means of technology, but also through a regulatory and political framework. These include national plans for energy and climate for 2021-2030 that are to be prepared by member states of the European Union as part of the Energy Union by the end of this year.

 

Attachments:

• Heating and cooling in Europe. How Poland plans to modernise the sector by 2050 and fulfil the Paris Agreement?
• Presentations from the session

 

Photo: European Parliament/ on lic. Creative Commons/ flickr.com 

 Strasburg, 14th June 2018

 

The European Parliament voted against three mandates of the Committee on Transport and Tourism (TRAN) regarding reports on the posting of workers, driving and rest periods for drivers, and cabotage as part of the works on the Mobility Package at the Strasbourg plenary session

The mandates to negotiate with the Council were undermined for all TRAN reports adopted on 4^th June this year by MEPs Wim van de Camp, Merja Kyllönen and Ismail Ertug on the market and social aspects of the Mobility Package – drivers’ working hours, transport posting, and market access.

One of the most important issues for Polish carriers and drivers accepted by TRAN on 4^th June were the provisions on exclusion of international transit and transport from the PWD (Posting of Workers Directive). Today, during the plenary session, 343 MEPs voted against excluding international transport and transit from the rules and regulations of posting, while 263 were in favour. Of the 751 Members of the European Parliament, 630 took part in the vote.

“The undermining of three reports by MEPs Wim van de Camp, Merja Kyllönen and Ismail Ertug, democratically adopted in the TRAN Committee is bad news for at least several reasons, not only for European carriers, but also for drivers and consumers. The reports were a well-balanced compromise obtained after months of debates on the forum of the European Parliament,” commented Agata Boutanos from the Brussels Representatives Office of the Union of Entrepreneurs and Employers immediately after the vote.

The Union of Entrepreneurs and Employers actively cooperated over the last year with other trade organisations in the fields of logistics and transport, employers’ and carriers’ organisations of the European Union. We develop positions, organise events, and prepare information materials – including a brochure addressed yesterday to all 751 Members of the European Parliament convincing to support the mandate for three reports adopted ten days earlier by the TRAN Committee.

“It should be emphasised that, contrary to the assumptions of the MEPs who voted today probably in good faith against the exclusion of transit and international transport from the rules and regulations of posting, as well as the report on working and resting time, those will be drivers who might lose after this turn of events. The report offered a great deal of flexibility in the collection of rests at home, as well as transparent rules for remunerating drivers,” adds Agata Boutanos.

The possibility of submitting amendments to the reports has been opened. In line with the European Parliament’s Rules of Procedure, amendments should be voted on during the next plenary session scheduled for July.