Warsaw, 15th May 2021
Commentary of the Union of Entrepreneurs and Employers on the Polish Deal
The Polish Deal is an exceptionally anticipated document, the presentation of which had been postponed several times. Having discussed today the general assumptions of this programme manifesto, we conclude that – in areas of particular interest to entrepreneurs – it does not contain any ground-breaking solutions.
In the Polish Deal, we fail to find the awaited proposals regarding the legal and institutional environment for business, while the issue of legal uncertainty – a key barrier to investment at the moment – is not even mentioned. The proposed measures presented in the section “Good climate for enterprises” are as a matter of fact recycled ideas that were previously announced or solutions that have been underway for some time. Part of them, such as the introduction of the institution of a family foundation or the extension of “Estonian CIT”, are of course beneficial for entrepreneurs; however, these proposals were already known and described in the past. Therefore, the Polish Deal does not introduce any major novelties in the field of entrepreneurship.
Certainly, two key components of the programme deserve approval, and these are: increasing the tax-free amount to PLN 30 thousand and the second tax threshold to PLN 120 thousand. Both laudable decisions are of the most rational nature and adjust these amounts to the economic reality in which wages have been steadily growing for years.
Unfortunately, these solutions are accompanied by a proposal for changes in the scope of health insurance, that is, the introduction of a model of a uniform premium in the amount of 9% of total income, which would not be tax deductible. Therefore, in practice, the Polish Deal may lead to an increase of burdens for some taxpayers.
Nevertheless, there are certain solutions discussed in detail that were announced during the conference and which are praiseworthy. In this respect, one must mention, among others, the changes regarding the possibility to build a house with an area of up to 70 sqm on request. In smaller towns, this may solve the housing problems of Polish families to a high degree. It is important that the regulations introducing this change directly indicate that the possibility of building in line with this procedure also applies to residential all-year-round houses.
The announced “liquidation of junk contracts” (civil-law contracts) raises serious doubts. If we are to understand that the government means to equate premiums for all types of contracts, this will result in a considerable reduction in the flexibility of forms of employment on the labour market. While we see the need to intervene in the scope of limiting tax arbitration, we would consider its proper form to be a general reduction of the tax wedge on remuneration earned under various employment contracts.
The trend towards digitisation that is evident in the Polish Deal is commendable both in terms of the healthcare system and other public services. It will be one of the greatest challenges ahead for the years to come – it is therefore advantageous that the topic of digitisation is particularly highlighted in the National Recovery Plan and the discussed programme document.
The complexity of the political programme under discussion, which concerns both economic issues and those related to public services, the healthcare system or pro-family policies (exceptionally important from the point of view of the problematic demographic situation), makes its detailed analysis time-consuming. In view of the above, the Union of Entrepreneurs and Employers will present a comprehensive position on the Polish Deal on Monday of the following week.