Thursday’s deliberations in the Public Finance Committee on the package of tax bills received in the Polish Lada were like a fierce football match in which almost all opposition deputies attacked the attackers, and in the opposing team there was only one member of the PiS and the head of the commission. Henryk Kowalczyk.
Janusz Cichoń, KO Member of Parliament, attempted to register PiS first. He honestly admitted that he, like his colleagues, did not know the 683-page tax bill (he read the law very briefly) and that without the help of tax experts, ordinary deputies would not be able to deal with so many regulations amending as many as 20 applicable tax bills effect.
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He called for the committee’s meeting to be postponed to the fifth of October, but to no avail. Representatives from the ruling coalition rejected his proposal. As well as requesting a public hearing, i.e. allowing citizens to participate in the debate.
PiS pushes the Polish deal
Also, the appeal of MP Isabella Leszczyna from KO to slow down the pace of work on the tax code, because it is burdened with many factual errors, has numerous loopholes, and is also accompanied by a lot of sentiment, poorly perceived Polish companies, has had no effect.
In turn, Henryk Kowalczyk reminded Labor MPs that when they arbitrarily voted a few years ago to lower the retirement age, they were “not bothered by a lack of decency”.
After an hour of exchanging harsh words, the commission finally began working on the content of the law itself. Its report is scheduled to be adopted at the next session of the House of Representatives, which will begin on September 29.
It follows from a simple arithmetic that the Polish Order will be passed by the Sejm in just 21 days. The bill was submitted to the House of Representatives on September 8, and the government self-amendment on September 14.
For comparison, according to barometrprawa.pl, in 2020, the proceedings of the law in the Chamber of Deputies lasted an average of 77 days, and in 2018-100 days.
A forest of regulations – hard to understand
We asked the experts if a powerful tax revolution could be implemented successfully and successfully within three weeks?
– This is legislative diarrhea, which has gone too far – says Grzegorz Szysz, partner and tax advisor from Grant Thornton.
It is not surprising that deputies alert the public that they do not understand the provisions in the Polish Lada, because even tax lawyers do not understand them.
– Three weeks is not enough to analyze the Polish transaction even for a tax advisor – admits Szysz. – In these recipes, every comma and point placed are counted. He says you have to compare laws, deciphering the author’s intentions more often.
Szysz gives many examples that the provisions of the Polish system are inconsistent with each other regarding the goals and effects they will produce. On the one hand, the government offers positive solutions to investors and deserves approval, such as the so-called contract system, that is, privileges and preferences to encourage foreign investors to enter Poland, and after a moment new taxes on lower income appear in the regulations that will strike them.
In turn, Bawe Nejman, a tax expert at Admiral Tax, states that this is not the first time that a Polish lawmaker has made sudden and dangerous tax changes in five to twelve, so that they can file from January of the following year.
It was the same last year with the double taxation of limited partnerships, which led to the mass flight of entrepreneurs of this type of activity into general partnerships and LLCs – not so long ago, the Estonian government introduced CIT, which was supposed to be a simplification and Facilitation for business. The work is over 200 pages long. This just shows how confusing the tax system is – gives a star example.
The “Confederates” ask what the European Union says?
Polish tax regulations change on average every few months. It is a global phenomenon. Meanwhile, in Germany or Great Britain, all tax changes, including rates and limits, are set 5 years in advance. – Brits today know how their tax credit amount or tax limits will change in 2023. Local government always tries to introduce all changes at least one year in advance – give the example of a tax expert.
Negman stresses that the same principle applied to the British by all Western European Union countries that leave their citizens for a year to adapt to the new regulations. It’s no different in the United States, where the last major tax change and update occurred in 2010.
Importantly, Polish legislative diarrhea does not only mean that Polish taxpayers must spend three times as much time on a settlement with tax authorities as their Western counterparts (World Bank data shows that a Polish businessman must spend 336 hours a year on tax settlements, during British time is only 105 hours).
The effects of this “legislative easing” can be seen in a significant drop in private investment. We have the lowest level of such investments in 25 years – recalls Izabela Leszczyna in an interview with money.pl and adds that Poland was also among the 10 most unfriendly business regions in the world (this is the latest study of the Global Business Complexity Index).
– After announcing the Polish deal in the form proposed by the PiS, we will probably be in first place in this arrangement – says the MP.
Krzysztof Bosak, a member of the federation, frankly admits that if he had large financial resources now, he would seriously consider investing in Poland. Precisely because of the astonishing pace at which our tax code is changing.
The MP also warns that the invention and introduction of new taxes by the government without prior consultation with the EU – as is the case with a minimum income tax – may end up as attempts to impose a new tax on hypermarkets in Hungary, i.e. a fiasco.
