Warsaw, 12th March 2021
Commentary of the Union of Entrepreneurs and Employers regarding the smartphone tax
In spite of the ongoing epidemic and the economic crisis accompanying it, the Polish government continues to invent new taxes. Over the last year, the sugar tax, CIT on limited partnerships, the rain tax, and the tax on streaming services were introduced, the collection of the tax on commerce began, and the concept of an advertising tax was presented. Recent media reports indicate that an additional project was given “a green light” – the introduction of yet another burden: a tax on smartphones. The Union of Entrepreneurs and Employers believes that the adoption of new taxes in the conditions of an epidemic is unjustified and harmful from the economic point of view, and the introduction of further sectoral and selective levies (apart from their negative impact on the market) leads to a consistent deterioration of the tax system by making it increasingly complicated. In addition to our general disapproval of multiplying tax, we are also particularly critical of the very idea of a smartphone tax.
It is clear that ultimately the economic cost of this tax will be borne by consumers forced to pay more for electronic equipment. Thus, for many households that found themselves in a difficult financial situation due to the coronavirus epidemic, the availability of such equipment (which nowadays essentially falls in the category of basic necessities required to, for instance, work from home or participate in online lessons) will decrease significantly. The rising prices of equipment will naturally reduce the competitiveness of Polish distributors against foreign entities. Electronics sold in Poland will become one of the most expensive in the region. An emerging possibility is therefore the outflow of consumers on the domestic market and the greater popularity of smartphone and laptop purchases abroad.
The systemic sense of the tax on smartphones is a completely separate matter. Its introduction would in practice consist in the extension of the catalogue of carriers covered by the so-called reprographic fee. The proceeds from it contribute to the budgets of organisations responsible for collective rights management. They are to constitute compensation for losses incurred by authors due to illegal copying of their works. This model, designed in a completely “analogue” reality, is completely detached from the present-day reality in which the importance of streaming services is rising.
The introduction of the smartphone tax also directly contradicts social expectations. According to the study by Social Changes, as many as 75% of Poles are against the tax, and more than half of the respondents generally believe that during an epidemic, taxation on electronics should rather be lowered than increased.
The study also directly confirms the diagnosis indicated in one of the previous paragraphs: the introduction of a tax on smartphones will lead to a decrease in demand for electronic equipment. More than half of Poles declare that the new tax will make them buy equipment less or definitely less often. Rising equipment prices will be the biggest blow to the elderly and less affluent people, who are already particularly vulnerable to digital exclusion.
To sum up, the Union of Entrepreneurs and Employers calls for the idea of the smartphone tax to be abandoned. There is still time to adjust the government’s plans to the economic reality and real social needs. The epidemic is the worst moment to introduce new taxes, especially those that would put a strain on electronic equipment availability, which is currently a particularly important category of products, necessary for online lessons or work from home. In the coming years, due to the ongoing digitisation processes (also in such aspects as the functioning of the state, for example healthcare), it is necessary to consistently nurture the public’s digital competences. The smartphone tax, on the other hand, will lead to a further digital exclusion of the most vulnerable social groups. Therefore, we consider it justified to abandon this idea.
Fot. JESHOOTS-com / Pixabay.com