Warsaw, 17^th July 2019

 

The Union of Entrepreneurs and Employer on the new authorities of the European Union: the biggest challenges from the point of view of the Polish economy are issues related to social affairs, the climate, and the future of the community

 

The Union of Entrepreneurs and Employers published a memorandum of its Representation in Brussels on the greatest threats and opportunities for the Polish economy resulting from the election of new authorities of institutions of the European Union. Therein the Union identifies key challenges and proposes specific recommendations for Poland.

A significant part of the law presently in force in our country are regulations developed and adopted at the level of the European Union. The impact of the Union on Polish entrepreneurs is twofold. Firstly, by implementing the regulations adopted in Brussels, we are changing the regulatory environment for companies operating in our market. Secondly, by adopting specific directives and regulations, the Union shapes the principles of functioning within the European Sigle Market, and this is a key issue for many Polish entrepreneurs.

“There can be no doubt that what is happening in the EU has a very large, and perhaps an increasing even, influence on Polish companies,” claims the President of the Union Cezary Kaźmierczak. “It was evident, for inexample, in the case of the famous GDPR and recent amendments to the regulations on posted workers. More and more key decisions are being made in Brussels, which is why we must carefully monitor the systems of interests that arise there.”

The full picture of the Union’s regulatory priorities for the nearest future will become known when the commissioners are elected and the European Commission’s agenda for the next term is announced. We can already at this moment assume basing on, for instance, the priorities of the Finnish presidency or the strategy adopted by the European Council, which areas may be the most important for the Union’s policy. From the point of view of the Polish economy, two of them are of highest importance: social issues and climate policy. Moreover, as a result of the increasingly bold concept of a multi-speed Europe, the third element key from the Polish perspective is the future of the Union iteslf.

“These three issues are areas where the interests and agendas of Western countries and Poland are most visible,” emphasises the Vice-President of the Union Marcin Nowacki. “Wealthier states are pushing for an ambitious climate policy, striving at the same time to standardise social protection standards in individual EU member states, or at least to eliminate the advantage of lower levying costs, which is a certain competitive advantage. At the same time, they consolidate within the eurozone which threatens to leave all other member states on the Union’s outskirts.”

From the Polish viewpoint, it is crucial that the implementation of the European Pillar of Social Rights does not entail the implementation of far-reaching solutions that affect the competitiveness of Polish companies, and climate policy objectives were defined realistically and taking into account the costs of energy transformation borne by individual countries. These in the case of Poland can be gargantuan and amount up to PLN 400 billion.

“Therefore, it is essential to monitor subsequent initiatives related to social protection, such as the introduction of European regulations on minimum wages or the revision of regulations on the coordination of social security systems,” says Jakub Bińkowski, the Union’s Secretary of the Law and Legislation Department. “Another highly important issue are the amendments proceeded as part of the mobility package. We must also strive for a good distribution of financial support for Poland from the Innovation Fund and the Modernisation Fund. Challenges ahead are plentiful.”

The Union’s experts emphasise that attention should also be paid to further development of European integration. The ‘two-speed Europe’ may mean less money for Poland from the EU budget and further access restrictions with regard to Western markets.

“So there is a multitude of challenges ahead, and therefore we should not focus on deliberating whether the Union’s elected authorities are good or not,” concludes Cezary Kaźmierczak. “Since one is able to identify both opportunities and threats, one needs to focus on making proper use all options in order to take advantage of the opportunities and to neutralise the threats.”

 

17.07.2019 Memorandum of the Representation of the Union of Entrepreneurs and Employers in Brussels: New authorities of the European Union – opportunities for the Polish economy and threats to it

6^th July 2019

 

Speech by Cezary Kaźmierczak, the President of the Union of Entrepreneurs and Employers, at a panel during the Program Congress of the United Right in Katowice, 5-7 July 2019

 

The Polish economy is at a crossroads. The hitherto forces behind our country’s development were, in simplified terms, (1) low costs, mainly low labour costs and (2) operational intelligence and motivation of Polish entrepreneurs. Low labour costs are already a thing of the past – Poles earn more than the Greeks and Portuguese, we are soon to surpass other countries too. The remaining attributes, however, we can still consider our competitive advantages.

How are we then to compete? My entire professional career has taught me that in order to win, one has to do something better, different or cheaper. The same goes for international competition. “Cheaper” belongs to the past. Can we do it “better”? I doubt it, as the 50-year-long break in the continuity of Poland’s development does not allow it. When the West was accumulating capital, perfecting technologies and management systems, and acquiring know-how – we were perfecting the art of hunting for toilet paper. We are not capable of competing with the West in terms of capital or technologies, because we simply do not have them. We must choose other areas in which we can realistically gain an advantage.

In my view, these ought to be the tools we can use to compete successfully:

Legal and institutional competitiveness – Creation of the best possible institutions for the business ecosystem in the world, including those of the judiciary, and the best and simplest economic and tax law in the world. Creation of legal acts addressing new areas (e.g. autonomous cars) as the first country in the world. If we are one of the best places in the world to run a business, entrepreneurs and innovators from around the world will flock to us. This will also release the full potential of operational intelligence of Polish entrepreneurs. It is within our reach, but first we need political will.

Workforce – In the 19^th century, workers were relocating from all over to where factories were located. In the 21^st century, factories move to places where there is available workforce. Poland should adopt a very aggressive policy in terms of demographics, so that Polish women would like to give birth to a second and third child. We should strive for a 2+3 family model in Poland. What has been done so far – despite it being praiseworthy – is not sufficiently tough. It has to be much bolder. If you ask me, I’m willing to support switching the lights off at 6 pm on a Saturday. However, this activity will only bear fruit in a quarter of a century. What has to be done now is taking real steps to attract Poles from Western Europe, North America and even Brazil. If we successfully implement the first point I made and become a global business paradise, maybe even up to a million of them return to their native land. Another tool we can make use of is a smart sovereign immigration policy and the welcoming and subsequent assimilation of economic migrants from proven directions, i.e. Vietnam, Belarus or Ukraine, in precise quantities required by our economy. The goal of our demographic policy ought to be 50 million Polish citizens by the year 2050.

Government – We need a more proactive and deliberate policies and activity by the government. Above all, at the forum of the European Union. We must firmly and assertively proceed with the complete implementation of the Services Directive. Polish companies are discriminated against, mainly in France, using a number of various methods, both legal and illegal. A company’s closure based on an anonymous denunciation for the period of six months is nothing out of the ordinary. Poland’s efforts of more than a decade on the EU forum have not brought any measurable results. One must apply adequate retaliatory measures to countries that are running a policy that is harming us, and communicate to them clearly that their companies will only be able to operate in Poland without any obstacles provided ours can do the same abroad. I will stop right here, but we should stop playing around and letting others treat us this way. If we do not react, it will only get worse. Our government must act decisively.

Public aid for business – We haven’t got a lot of money. Therefore, the money we do have should be spent sensibly. In the meantime, we spend them all over the map. It’s hard to detect any strategy or thought in it. And a significant part of these funds goes to… multinational corporations!!! We’re acting as if we wanted everything at once. When Israel was being created, its founders decided to focus on four areas: hydrology, optics, the arms industry and agriculture, and on these sectors they concentrated all their money and efforts. Today, they sells 1 kg of tomato seeds that can grow in the desert for USD 100,000 and all Arab armies must use their optics. We must give up on our megalomania and delusions of grandeur, we have to choose several areas and invest there what we have. These should be new fields of science or industry – I doubt we have any chances competing e.g. with Germany in Diesel engines’ manufacturing. What these areas should be is a topic for a complete different discussion, but there should definitely be no more than 5 of them.

Of course, I can hear this laughter, this cackle, people saying “it’s impossible, it won’t work, it will fail” etc. I’m used to it – all through the 1980s, I would hear that communism could not be overthrown, and the sheer idea of the Soviet troops leaving Poland would make some people roll on the floor laughing uncontrollably.

Every nation has what it deserves. So do we. We have to break away from this tradition of mediocrity. Thus far, we are mediocre at everything. And everything in our hands.

 

***

Speech at a panel during the Program Congress of the United Right in Katowice, 6^th July 2019.

 

Fot. geralt/pixabay.com

Warsaw, 4^th July 2019

The Union of Entrepreneurs and Employers signed an agreement on cooperation
with the Forum of Polish Entrepreneurship “Korona” in Vilnius

 

We are pleased to announce that on 18^th June 2019, the Union of Entrepreneurs and Employers signed an agreement on cooperation with the Forum of Polish Entrepreneurship “Korona”. The Forum’s registered seat in located in Vilnius.

Both parties to the agreement, within their respective competences and in accordance with their roles in the economic lives of Poland and Lithuania, will pursue efforts to develop cooperation in the scope of a more effective support of entrepreneurs, organizations, and companies in their countries in order to intensify and accelerate the advancement of all forms of economic activity on an international level.

We are looking forward to a fruitful cooperation.

More information about the Forum of Polish Entrepreneurship “Korona”.4

Warsaw, 24^th May 2019

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS
ON THE NATIONAL LONG-TERM FINANCIAL PLAN

 

Considering the significance of legal changes of very significant economic importance that were presented in the National Financial Plan for 2019-2022, the Union of Entrepreneurs and Employers as a representative organisation of employers, expressing concern for the state of public finances, as well as the country’s stable economic growth, publishes the following position relating to key actions to be undertaken that were announced in the document.

1. Introduction of the obligation to apply the split payment mechanism

Since 1^st July 2018, there is a voluntary mechanism for split payments in Poland. From that moment on, all entrepreneurs have a special VAT sub-account in their bank, to which – should the customer decide to use this mechanism – they receive tax, whereas only the net amount from the invoice goes to the entrepreneurs’ main bank accounts.

Implementation of the voluntary split payment is, together with the improvement of the tax administration or the introduction of uniform control files and the reverse charge mechanism in some industries, an element of the fight against fraud in the field of VAT. There is no doubt that this fight should be considered largely as the government’s success. Over the years 2015-2018, the revenue from taxes on goods and services increased by as much as PLN 40 billion, and the gap in tax collection decreased from over 20% to – depending on the analytical centre – a dozen or even less than ten percent.

These are undoubtedly successes, which is why the announcement of the continuation of the policy of reducing the VAT gap is positive. The fact that the obligatory split payment is to be replaced with such solutions as the joint liability of taxpayers, also deserves approval because the tool caused considerable doubts. At the same time, we would like to draw attention to the issue of the impact of the split payment mechanism on the financial liquidity of entrepreneurs, especially from the SME sector. This is essential, taking into account that one of the industries covered by obligatory split payment is the construction industry, in which the share of micro and small Polish companies (especially on the part of subcontractors) is clearly high. Since the introduction of an optional mechanism, we have received signals from them that it has a negative impact on their liquidity. In our opinion, the introduction of the obligation to use split payment, without a certain correction of statutory regulations relating to the possibility of using funds available in the VAT account, may lead to the deepening of these problems.

Therefore, although we do not object strongly to the general direction of the changes proposed in the application of the split payment mechanism, we appeal that the risk of their negative impact on the financial situation of a number of Polish entrepreneurs be taken into account in the proposed changes. Especially considering the risk of negative impact on the situation of small companies from the construction industry, which have recently been seriously affected by the increase in the prices of construction materials, as well as the increase in labour costs. Among the potential changes that project’s authors could analyse from the above-mentioned point of view, one can distinguish the shortening of the maximum time in which the taxpayer receives a tax surplus in relation to the tax due to his normal account. At the moment, this is a total of 85 days (25 days for a refund to the VAT account and 60 for transferring funds to the taxpayer’s normal account). Representatives of the ministry emphasise that the transfer of funds to the current account takes on average no more than 21 days, henceforth we assume that the optimal maximum time for completing both of the above procedures would be a 40-day period. Approving the general direction of changes, we postulate for the introduction of adjustments ensuring that the obligatory split payment in specific industries will not seriously undermine the financial liquidity of entrepreneurs.

2. Tightening the classification of revenue from “non-agricultural business activity” (“entrepreneur’s test”)

We look with particular concern at the postulate of tightening the classification of revenue from “non-agricultural business activity”. Already the government’s information policy alone must raise serious objection, in which the phrase “entrepreneur’s test” has been appearing, disappearing and reappearing so often that ultimately – although we know the exact contents of the document called the National Long-Term Financial Plan – even we are unable to determine what mode this tightening of regulations would take. Individual representatives of the government give statements to media and in certain publications saying that no legislative changes are planned, while in the Long-Term Plan on page 60, it is clearly written that a tool to achieve the objective described by the Ministry of Finance as “restricting the scale of unauthorised classification of revenues received by natural persons in terms of the source, non-agricultural business activity and, as a result, limitation of tax arbitration and labour market dualism”, is to amend the act on personal income tax and “other regulations” tightening the classification of revenue to the source “non-agricultural business activity”.

The Union of Entrepreneurs and Employers demands in the first place a clear message regarding the formula of the planned tightening. This is of key importance from the point of view of many entrepreneurs running a sole proprietorship, as all regulatory changes will naturally apply from the date of entry into force of the act (including vacatio legis), whereas a possible change in the interpretation of existing regulations may lead to undermining tax declarations submitted over the five-year-long period preceding the entry into force of the new regulations, and consequently the payment of tax arrears increased by interest by entrepreneurs who did not pass the “test”. Regardless of the formula, the “test” itself also creates serious risks in the field of labour law – undermining the legal relationship between two parties of a B2B contract and determining the existence of an employment relationship have serious consequences, for example, in terms of unused holidays or contract termination deadlines.

In the first place, we would like to ask the government to provide the Social Dialogue Council with information on the state of progress of works on the “test” and its potential formula.

We would also like to draw attention to the fact that the conditions necessary to meet, both in order to obtain the status of an entrepreneur and to be able to settle income tax within the framework of a flat tax provided for persons running a non-agricultural business activity, are already specified in the regulations in force. We believe that it is not possible to create a tool for determining whether a sole proprietorship is conducted only because of the desire to avoid a higher tax rate (32% on a tax scale). A tool that allows for a reliable and yet non-infringing on the principles of freedom of business operations, as well as a number of other principles contained, for example, in the Entrepreneurs’ Law (part of the Constitution for Business). We believe that the implementation of the “test” in any formula would be a very dangerous phenomenon and would constitute a battle against the effects of the problem, not against the problem itself. Running a business activity is an attractive alternative for full-time jobs due to the high non-wage costs of labour, which come up to approximately 40% of the total cost of employment. For this reason, to reduce the phenomenon of “pushing employees out” to self-employment, it would be necessary to reduce the tax wedge, not to increase the fiscal burden for a part of sole proprietorships.

The “entrepreneur’s test” can also potentially lead to a number of negative economic consequences. In addition to the possible slowdown in GDP growth, there might be such risks, among others, as Poland’s inferior position in the race for talent, especially in highly specialised areas (we are already losing this race now, and this gap between the demand for highly qualified staff and its supply will only increase), or incentives to create unnatural economic structures (issuing “empty invoices” within “trilateral schemes”, dividing of entities, or the potential expansion of the grey zone).

Considering the above, it is necessary to contemplate whether the assumed goal is worth carrying such a huge risk. We also draw attention to the fact that it is very uncertain how to obtain additional funds in the amount of PLN 1.2 billion due to the tightening of revenue classification in terms of the discussed source. The experiences of other countries, such as the United Kingdom, in which analogous regulations have been in force for many years, give us grounds to think that the actual inflows may turn out to be significantly (even several dozen times) lower than planned.

The Union of Entrepreneurs and Employers is ready for a substantive dialogue dedicated to the tax burden on labour and business activity and devoted to a possible redesign of the system in such a way that the labour market functions on a fair basis. However, we do not approve of unclear ideas of additional “verification” of entrepreneurs, as in our view the implementation of such solutions would be extremely dangerous.

3. Taxation of digital enterprises

In the Long-Term Financial Plan, a declaration was made to tax the income of digital enterprises providing services on the territory of the Republic of Poland. The authors of the document rightly claim that the current international corporate taxation rules are completely unadjusted to the realities of the 21^st century and the challenges arising from the digitisation of the economy, but they draw erroneous conclusions from this diagnosis. The Union of Entrepreneurs and Employers is opposed to a sectoral approach to the tax system. The scale of tax avoidance has become – due to the economy’s globalisation and digitisation – very severe for the budgets of European countries, including Poland, but the tool for solving the problem must not be to select industries and introduce separate levies for each and every one of them. We are therefore in favour of a debate on the model of taxation of legal entities conducting business activity, expecting as part of this debate the possibility of many alternative variants of systemic changes being presented. However, the sectoral approach is unacceptable and simply unjust, especially as the available studies show that a large proportion of digital enterprises pay a higher effective income tax rate in Europe than companies operating in “traditional” industries.

From the point of view of the impact of potential regulations on Polish economic entities, and consequently also on the entire economy, it seems to be of significance that there is no harmonisation of digital tax solutions in place at the level of the European Union, nor is there a common approach developed within the OECD. Thus, by introducing such a tribute, Poland will decrease the competitiveness of Polish entrepreneurs against entrepreneurs operating in countries that will decide not to introduce a digital tax. The implementation of separate regulations on taxation of the digital industry by individual EU member states also generates chaos, as these companies naturally operate in cross-border models and are not limited to the territory of the state in which they are located.

In spite of the fact that the new tribute is to be levied on “large” digital enterprises, there will also be losses for entrepreneurs from the SME sector who, since they’re cooperating with their larger partners, not only make use of their services (and by introducing a tax their prices will increase for both consumers as well as for business partners), but also establish deeper relationships, thanks to which they amass know-how among other things. Therefore, the introduction of a digital tax may affect the condition of micro-, small- and medium-sized companies in the digital industry, just as a ricochet would harm people in a fight.

ZPP therefore calls for a debate on the taxation of legal entities conducting economic activity and for the withdrawal by the government from a sectoral approach, including the proposal to introduce a digital tax.

4. Indexation of the excise tax rate on alcoholic beverages, tobacco products, dried tobacco and novelty products

In the Long-Term Plan, the goal is included to index the excise tax rate on the abovementioned excise goods by 3%. The Union of Entrepreneurs and Employers would like to emphasise that the policy pursued so far towards excise goods, especially in the area of tobacco products, has enabled a significant reduction of the grey economy and the expansion of the legal market. This policy was conducted in two ways – both by increasing the efficiency in the field of excise goods of the crime fighting authorities, and by capping further increases in the tax rate. The results, which were achieved thanks to this combination of measures, are very good, but not yet entirely satisfactory – the grey zone of e.g. cigarettes decreased by 30%, but it still remains higher than the European Union average. Pursuant to the above, it is recommended to continue the current policy and introduce further reforms, especially in the area of the penal-fiscal code. An excise tax increase, due to its direct impact on the final price of the products sold, generates an unnecessary risk of recreating at least part of the informal economy instead of further reducing it.

As regards the possible increase in excise tax on alcoholic beverages, as far as we understand the postulate of raising it, because rates have not changed for a long time, we are strongly opposed to a uniform approach to all types of alcoholic beverages. We believe that due to changes in the alcohol-drinking culture (i.e. first and foremost, the decrease in consumption of beverages with a high alcohol content and strengthening of the segment of beverages with much lower alcohol content), the possible adjustment of excise rates should be differentiated and allocated on an individual basis to each type of alcoholic beverages. We disapprove of a scenario in which the excise tax on all drinks is raised an equal rate of 3%, but we would accept a solution under which the excise duty on alcoholic beverages would increase by 3% on average while being differentiated depending on its type. Such a mechanism should be based on a much higher increase in taxation of beverages with a high alcohol content, and lower in the case of beverages with low alcohol content. There are also options to consider in the context of which the excise duty rate for spirits would depend on their quality (e.g. a preferential rate for authentic “Polish vodka”), as well as the bottle capacity in which they are sold. The latter solution could be an alternative to the sale ban of popular “monkeys” (tiny bottles of strong alcohol) due to the disastrous effect that high ABV beverages sold in small capacities have on society (this is reflected in research and analysis results; very often those are young people who buy the smallest bottles) and its health, higher taxation thereof seems to be a reasonable solution.

Considering the above, the Union of Entrepreneurs and Employers calls for legislation to tighten the system in the field of excise crime, as well as for the continuation of a reasonable excise tax policy for tobacco products. As for excise duties on alcoholic beverages, the Union calls for activities such as those described above. With regard to tobacco products, it is noteworthy that regular excise duty increases in the years before 2015 brought counter-productive effects (expansion of grey economy, legal market shrinkage, lower budget revenues) and also raised rates to relatively high levels. Any increase in rates, and in particular the introduction of specific interest rates, according to which they should be increased, should be preceded by a thorough debate, for example within the framework of the Social Dialogue Council.

5. Taxation of the liquid for electronic cigarettes and of novelty products

The amendment already in force, under the Act of 12^th December 2017 amending the act on excise duty, is the taxation of electronic cigarettes and novelty products. In this respect, we would like to draw attention to the fact that it is expected that the proceeds from the excise duty on the aforementioned products will indeed be of marginal character. If only PLN 37 million is expected in the year 2020 with effective taxation of these products beginning on 1^st July, it can be assumed that the expected annual income from this tax is not more than PLN 75 million. They literally constitute a permille of aggregated revenues from excise duty on all excise goods (PLN 73 billion planned for 2019). On a macro scale, in terms of budget revenues, their taxation will be virtually almost neutral. We also highlight the fact that the approved rates for liquids for electronic cigarettes and novelty products are high and may lead to the collapse of these – just emerging – markets that provide smoke addicts with a healthier (as proven by many studies) alternative to traditional tobacco products. In connection with the above, the Union of Entrepreneurs and Employers appeals for a discussion regarding the revision of excise duty rates in the given scope.

6. Increase in tax deductible expenses, exemption from personal income tax of a part of young people, introduction of the third tax threshold

The Long-Term Financial Plan for the years 2019-2022 contains a number of ideas collectively defined as tools for “tax wedge limitation”. These include:

• exemption from personal income tax of employees under 26 years of age who earn up to PLN 42,764;
• more than doubling the flat-rate tax deductible expenses for employees;
• lowering the tax rate from 18% down to 17% for income up to PLN 42,774.

The Union of Entrepreneurs and Employers draws attention to the fact that none of thsee proposals is inherently systemic. The closest to this is certainly the proposal to raise the tax deductible expenses for employees, but it will not lead to a significant change in the financial standing of taxpayers. The potential tax benefit from this operation will be only a few dozen zlotys per month.

The other two changes are of a very specific character, consequently their scope will be small. In the opinion of Union, the proposal to exempt the income of taxpayers up to a certain age from taxation is not justified. All the more so if this proposal were to concern only employees (i.e. people working on the basis of an employment contract) earning no more than PLN 42,764. In our view, this is a change devoid of rational justification. Apart from our doubts whether this proposal complies with the Polish constitution, as it exempts from personal income tax only a specific (and yet further narrowed down) age group, it seems to be devoid of economic sense. Young people entering the labour market find themselves currently in the best situation in three decades, and their wages and salaries are regularly growing. A simple calculation also shows that the exemption from PIT will not lead to the fact that an employment contract becomes a form of employment more attractive than a civil law contract, which seems to be one of the intended goals to be achieved with this proposal.

Furthermore, lowering the tax rate for the lowest income will not lead to a significant improvement in the situation of the least affluent of taxpayers (a one percentage point reduction translates into a dozen up to several dozen zlotys per month).

The measures outlined above will not induce a significant reduction of the tax wedge, nor will they constitute noticeable support for taxpayers – even within those narrowed down groups that are to be covered by the new proposals.

At the same time, the proposed solutions turn out to be very costly at the national level – the cost of the reduction in budget revenues from PIT was estimated at over PLN 10 billion. This amount is not much lower than the potential cost of raising the tax-free amount by half – and this measure would be common and would apply to all taxpayers who settle their personal income tax in accordance with the tax scale in force.

The Union of Entrepreneurs and Employers recognises and has repeatedly emphasised the problem of the tax wedge being too high. However, we believe that actions such as those proposed in the Long-Term Financial Plan, i.e. “targeted” at specific groups, although they are very costly for the budget, will not bring the expected results and will not significantly improve the financial situation of employees. We therefore call for a debate on possible ways to reduce the tax wedge for all employees, not just select groups.

7. Limiting the avoidance of paying premiums for pension and disability insurance

Among the activities “strengthening the system of social security contributions” planned for 2018-2020, limiting the avoidance of pension and disability insurance contributions takes a major place. Among the objectives of this undertaking, the following were indicated: “tightening the system of collecting social security contributions from junk contracts”, “limiting the avoidance of paying premiums resulting from entering into junk contracts instead of contracts of employment” or “expanding the income base from junk contracts, from which social security contributions are paid”.

First of all, the Union of Entrepreneurs and Employers would like to emphasise that in an official governmental document, colloquial terms should never appear, e.g. depreciating agreements concluded in accordance with applicable regulations, including the principle of freedom of contracting in a civic society, that is civil law agreements. Such phrasing as “junk contract” is more suited to a less substantive debate at a rally than to a serious document showcasing the financial policy of Poland for the coming years. Moreover, these terms are offensive to both parties concluding these types of contracts. We regret, therefore, that they were ultimately included in the contents of the Long-Term Financial Plan.

As for the subject matter – both the objectives and the tools related to the avoidance reduction of pension and disability insurance premium payments have been described so vaguely that it is difficult to diagnose what is actually planned to be done in the above-mentioned scope. “Expanding the revenue base from junk contracts, from which social security contributions are paid” can be understood in many ways. Similarly, the tool that is aimed at achieving the goal, i.e. “tightening the rules subjecting to pension and disability insurance under a junk contract”, is not specified. From the entirety of this fragment, it may result that the government plans to carry out both legislative activities (expanding the income base subject to premiums, and premiums coming from civil law contracts), and intensifying control activities (verification of concluded civil law contracts for possible undermining and finding the existence of a relationship based on employment).

It is difficult to blame the government for the willingness to fight the “dualism” on the labour market, but we point out the necessity to take into account at least two factors. The first is the need to maintain the proportionality of the measures applied, taking into account the scale of the problem. Out of approximately 17 million professionally active people, 2 million people are employed on the basis of a civil law contract according to the Polish Central Statistical Office. On the other hand, data of the National Labour Inspectorate show that out of all the contracts of this type, about 15% of them meet the criteria of an employment contract. It turns out that the problem concerns 300,000 people. In absolute numbers, this is a lot, but it is still just a small fraction of the entire labour market (less than 1.8%). Taking this into account, it must be stated that – focused exclusively on the examination of this small part of cases – the design of new regulations or tightening of controls poses the risk of using disproportionate measures, repressive to honest employers.

The Union of Entrepreneurs and Employers, therefore, calls for formulating provisions in such a manner that the proportionality of the measures applied is ensured, especially considering the real scale of the problem.

The second factor is to draw attention to the cause of the problem (whose nature is marginal and we emphasise this fact) of making use of civil law contracts in a way that is non-compliant with the provisions in force. It is, of course, the disproportionately high tax wedge in case of regular employment. In this place, one should return to one of the previous points contained in this position and appeal for a debate about the real cause of the various pathologies on the labour market. It seems that neither extending the base to be covered by the new regulations nor tightening the application of the current regulations will significantly contribute to the reduction of abuses in the scope of civil law contracts.

8. Abolition of the limitation of the annual basis for calculating contributions to pensioner and retiree insurance

As part of the National Long-Term Financial Plan, the subject of lifting the limit of the annual basis for calculating social insurance and disability contributions within a calendar year has once again come back. In the current legal state, this basis must not exceed the amount corresponding to thirty times the projected remuneration in the national economy for a given calendar year. The idea of removing this limit appeared in the Act of 15^th December 2017 amending the act on the social insurance system and some other acts. On the motion of the President of the Republic of Poland, the Constitutional Tribunal examined the compliance of the Act with the Constitution and ruled that it was unconstitutional due to the manner in which it was adopted.

Although the ruling of the Tribunal did not refer to the subject matter of the case, the Union would like to strongly emphasize that removing the 30-fold limit is a thoroughly irrational move – for two reasons.

The first is a simple observation that carrying out this action means striking a blow at the Polish middle class, which is still in its infancy. According to the Regulatory Impact Assessment attached to the draft law, the liquidation of the limit of the annual contribution assessment base would concern about 350,000 insured. Higher premiums for retirement and disability insurance mean that the remuneration of these people would decrease. According to the estimates presented by the project’s authors, it would be a loss of the order of just over PLN 1 billion a year. So much money would neither go to the real economy nor is truly intended for either consumption or savings. The funds would top up the budget of the Social Security Fund.

At this point, one can move on to the second reason why the proposed idea is a harmful one for the economy and for the Polish social security system. The elimination of the contribution base limit, even though at first, it would lead to a slight increase in inflows to the Social Insurance Fund (at the same time causing a significant drop in income of some households), in the long run would only be an additional burden for the Fund, which is already in a difficult situation. The limit of the basis of the dimension secures the Fund against the necessity of paying out huge pensions in the future. In other words, by setting a limit, the state at the same time allowed to leave more money in the pockets of the best-earning workers and outlined a certain maximum limit for the amount of a future pension. By eliminating this fuse, we are opening the gate to paying out several dozen thousand zlotys in the next decades – in a situation in which the Fund will face more and more problems resulting from the fatal demographic situation and the decreasing number of people in the productive age. According to official SSF forecasts, the Fund’s deficit in 2060 (in values discounted for 2014) may amount to over PLN 80 billion – and this option does not involve the abolition of the limit.

Given the above, the Union of Entrepreneurs and Employers – in a certain way repeating the arguments already used in the course of the proceedings abolishing the 30-fold limit – again calls for the withdrawal of this intention. It will be harmful to both the society whose strength in the future should be built by the middle class, and the social security system.

9. Final remarks

The Union of Entrepreneurs and Employers is of the opinion that a significant part of the proposals included in the National Long-Term Financial Plan is harmful. The drafted economic policy project that can be found included in this document is completely inconsistent. The government is planning to spend in a “carefree” manner over PLN 10 billion on tax changes, which from the point of view of an average working person’s purse or wallet will be almost imperceptible, while proposing measures that are very aggressive, potentially repressive for entrepreneurs and whose fiscal effect will be rather meagre.

A plethora of information can be found in the document that might be rather interesting from the point of view of participants of public life (e.g. data with regard to the project on the long-term stability of public finances, assuming that spending on health care in the period up to the year 2070 [!] will be at the level of maximum 5.2% of the country’s GDP, which is astounding from the point of view of official declarations of spending at least 6% of GDP for this purpose). However, the most important from the point of view of entrepreneurs are the proposals regarding two systems: taxes and social security – and the Union of Entrepreneurs and Employers evaluates both, in principle, negatively.

We do nevertheless hope that the government will undertake discussion with representative social partners concerning all of the points listed above, and will be open to their arguments, as a result of which the proposals contained in the Plan will thoroughly be improved and corrected.

 

24.05.2019 Position of the Union of Entrepreneurs and Employers on the National Long-Term Financial Plan

 

Fot. Alexas_Fotos / pixabay.com

Warsaw, 5^th June 2019

 

Entrepreneurs want a well-governed Poland

 

On 5^th June 2019, a social campaign was launched under the title Well Governed Poland. This is yet another undertaking of the Union of Entrepreneurs and Employers, within which the demands are raised to improve the relations between officials and citizens and entrepreneurs as well as to increase the efficiency of administration.

The main difficulty experienced by many citizens and companies in relations with officials is inequality. From the very beginning, the administration looks down on its partners. The relations of administrative bodies with citizens are unequal in nature – officials have a certain amount of power. Restrictive formalism and the lack of openness to the participation of social bodies in both governing or legislating also leads to citizens losing confidence in state authorities. The problem intensifies when officials disregard the public opinion’s voice during legislative procedures or when implementing new regulations. And to what effect? Acts that need to be amended several times, there are gaps in regulations, decisions are inconsistent with court judgments. The citizen remains an ignored party and has no guarantee that the legal reality in which he operates will not change dramatically in the blink of an eye. Will there be a public holiday in two months’ time on Monday? Can the store one runs be open, because it handles courier shipments? These things may seem trivial and not affecting the majority of society in a significant way, however, the amassed sum of incorrect practices end up as enormous problems for the functioning of the Polish administration.

It is a well-known fact that everyone’s a critic. However, proposing one’s own solution to a problem is a bit more difficult. Nevertheless, this is the task undertaken by the Union of Entrepreneurs and Employers. The campaign Well Governed Poland will be a platform for discussion about positive administrative practices, a source of knowledge and information about efficient management of public goods, as well as the place for honest reflection on the state’s operations. The basis for the campaign is the concept of Good Governance which focuses on the authorities’ openness to the voice of the public. This means carrying out broad social consultations both at the stage of decisions planning how to solve a given problem as well as during the implementation of individual ideas. The basic goal of Good Governance is efficiency manifested in planning the effects of adopting a new law, striving for a compromise accepted by all interested parties, so as to satisfy their needs to the maximum extent and thus avoid the law being broken or the situation when it being exercised is avoided at all cost.

By means of a campaign conducted mainly through Twitter and the Polska Dobrze Rządzona (Well Governed Poland) website, the Union of Entrepreneurs and Employers wants to set a substantive discussion in motion concerning the state of Polish administration.

“We are entrepreneurs, so obviously we care about the state’s development and that of its economy. We will achieve more with cooperation with the administration than without it. Therefore, we want the legislative process to be transparent and diligent, and the officials to take our proposals and feedback into consideration. If the goal of legislation is to create good laws, then someone has to start taking seriously both the collection of our positions and the analyses thereof. This will allow us to build trust in the state, which is necessary if we want entrepreneurship in our country to develop dynamically. The potential of Polish economy has been blocked for years by the ruling class, who often adopt they want first, without taking the opinion of the social partners into account, and then still implement it the wrong way,” says Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers.

Bearing in mind the due diligence assessment of the activity of the state, examples of the Good Governance will be published as articles on the website of the campaign. Individual policies and solutions will be analysed in terms of their compliance with the campaign’s leitmotif. Moreover, absurd or surprising examples of law adopted by Polish parliamentarians will be collected in the section called Legislative Roulette.

Warsaw, 21^st May 2019

 

The Union of Entrepreneurs and Employers appeals to Polish entrepreneurs
regarding the Sunday elections to the European Parliament

 

This coming Sunday, May 26^th, citizens of the European Union will elect their representatives to the European Parliament. This institution has a significant impact on legislation at the European level, including legislative solutions key from the entrepreneurs’ point of view.

Several past years have taught us that defending the interests of Polish companies and consumers on the common European market requires arduous work of our representatives in Brussels.

Therefore, we appeal as the Union of Entrepreneurs and Employers to Polish entrepreneurs to take an active part in the Sunday elections to the European Parliament and to pay attention to whether the persons for whom they cast their vote are competent to defend the interest of Polish economy on the international arena.

We urge you to vote for those candidates who in their postulates and previous activities have spoken positively about the following key issues affecting companies in our homeland, and as a consequence Poland’s economic interest, without undermining the idea of our country’s membership in the European Community – the Europe of Nations.

1. Implementation of the Services Directive – containing the original assumptions of the European Union’s market freedom;
2. Lifting restrictions on internal movement within the European Union for Polish logistics companies and Polish drivers;
3. The adoption of strict regulations for consumer protection against unfair practices of selling different quality products under the same brand in different EU countries;
4. Adoption of solutions regarding the harmful effects of the zero VAT rate in trade between European Union countries;
5. Analysis of the effects of the introduction of the GDPR and its revoking in the event of negligible benefits for consumers, at high market costs in the form of loss of competitiveness to Chinese and American enterprises;
6. Signing a duty free agreement with Great Britain in the event of Brexit and abandoning the harmful “punitive” policy detrimental to all member states, including Poland;
7. Re-analysis and amendment of rules and regulations concerning consent for state aid, so that they do not favour certain countries at the expense of others;
8. Adjusting the rigors of the EU climate policy to the original Paris Agreement, without additional limits above those adopted by major players (China, India or the USA);
9. Objection to the Nord Stream 2 project and analysis of the proposals for loss compensation for countries that may suffer as a result of the German energy isolation policy;
10. Ensuring equal status of EU countries in terms of the amount and rules of granting agricultural subsidies;
11. Legislation concerning excise goods in consultation with industry representatives, with maintaining competition on the market and protecting public health in mind;
12. Minimising the burdens resulting from the lack of coordination of social systems on the European labour market and limiting the introduction of new administrative and financial barriers for mobile workforce.

 

Union of Entrepreneurs and Employers

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