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Report of ZPP: Bureaucracy, quasi-legislation and complicated tax system as the biggest barriers for running business in Poland



Recommendations of Union of Entrepreneurs and Employers concerning amelioration of the conditions of running companies in Poland have been  the same for years – Polish tax system requires fundamental reformation, commercial law ought to be simplified and extra-remuneration costs of work have to be lowered. These are the conclusions of the 7th edition of the Report of ZPP “Conditions of running companies in Poland 2017.”

In 2016 , Polish economy did developed dynamically in comparison to other European economies. We still can’t say that there is a significant improvement of the conditions for running business in Poland, though. For the tangible changes to happen, the whole tax system in Poland need to be fundamentally repaired. It is no use in “ameliorating it” since that would require even more regulations. Law should be created in a way that an average citizen can easily understand it. For the 1234th time, I assert that entrepreneurs don’t have time for many-hours-long reading sessions with constantly updated acts of law – said Cezary Kaźmierczak, President of ZPP. We hope that some of the initiatives processed by the government and aiming at amelioration of the entrepreneurs’ situation will bring positive changes to this sector, he added. 

“It turns out that the basic tax acts were altered 53 times in 2016 only. It is less than in 2015 when there were 65 changes, but it’s obvious that there isn’t any improvement in this regard. Basic, fundamental acts regulating the tax system are revised in a blink of an eye” – we can read in the Report of ZPP.

We can conclude from the Report that if someone wanted to stay up-to-date with all of the acts of law passed in 2016 in Poland, he would have to spend 4 hours and 17 minutes a day to do so. Moreover, in 2012–2014 there were 56 times more regulations introduced in Poland than in Sweden, and 43 times more than in Belgium.

ZPP recommends simplification of the commercial law to be somewhat similar to the Wilczek Act from 1988.

VAT stays one of the main problems of Polish tax system. And the most troublesome thing within VAT are the long-lasting suspensions of tax refunds – stated Jakub Bińskowski, Secretary of the Department of Research and Analyses of ZPP.

He added that indeed, some of the refunds are suspended because they are frauds committed within criminal organisations, but the remaining hundreds of millions zloties are retained without any plausible basis. Such practises result in problems with solvency of honest entrepreneurs and influence assessment of Polish tax system negatively.

Extra-remuneration costs of work are another big problem for companies in Poland – they constitute 50% of gross remuneration. Contributions for the Social Insurance are currently ones of the highest in OECD.

In regards to legal environment for business, Poland stays far behind the western countries. If establishing and running companies in Poland are to be easy and semplice for the citizens, many acts considering taxes should be written from scratch, extra-remuneration costs ought to be lowered and state administration must reduce number of its employees – said Marcin Nowacki, vice President of ZPP.

There are also some positive aspects – concerning financial condition of enterprises and unemployment. Net profit of the non-financial enterprises augmented by 11% in comparison to analogical period of the previous year. The unemployment rate registered at the end of the third quarter of 2016 was 8,3%. In the same period of 2015 it was 9,7%. There was also a significant rise in number of work offers – at the end of the third quarter of 2016 there were 139 thousand offers, whereas in December 2015 there were only 78,6 thousands.

In the juxtaposition from this year analysing: the quality of tax system, easiness of operating business and level of the economic freedom in different countries around the world, Poland has moved up in comparison to the last-year results. The only index which is worse is the economic freedom – in the Index of Economic Freedom Poland has dropped in relation to last year.

One of the biggest challenges (and goals) for the coming years must be: consistent introduction of the freedom friendly policy, reduction of great part of the unnecessary regulations and liberalisation of economy combined with sensible tax legislation basing on higher legislation standards than today – conclude the authors of the Report. 

Therefore the recommendations stay the same as in 2016.


Report of ZPP: Conditions of running companies in Poland 2017_pdf

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