Tax procedures, reporting obligations, the changing law and delayed administrative procedures – these are the four worst characteristics of Polish bureaucratism. Data cited in the report prepared by Employers of Poland and Grant Thornton is overwhelming. According to Employers of Poland, it proves that bureaucratism is a bigger problem than hard competition.
The report was prepared as material for discussion at the Polish Economic Congress, devoted precisely to the issue of the adverse imoact of bureaucracy on the economy.
– The scope of bureaucratism in our country is horrendous. In 2014 alone, 1995 legal documents came into force, totaling over 25 000 pages, of which over one third is concerned with issues related to the functioning of companies! – explained President of Employers of Poland Andrzej Malinowski. He emphasized that improving the tax law, introducing a new Labour Code and improving the efficiency of state administration should be treated as priorities.
The report prepared by the advisory and consulting company Grant Thornton shows how grave the situation of Polish companies can be. When it comes to tax procedures it only needs to be said that at the end of 2015, the Polish tax system consisted of 11 key acts and 260 regulations issued by the Minister of Finance. VAT issues are regulated on 990 pages, while PIT takes up 2717.
Another nemesis of Polish entrepreneurs is the excessive and nagging reporting. An average Polish company files 209 forms a year – or one form for each working day.
– A platform for dialog between public institutions has to be created so that we may learn which data have to be provided by entrepreneurs and which can be acquired in other institutions – said Przemysław Polaczek of Grant Thornton. – Different institutions often ask for the same thing.
The quality and stability of lawmaking is another cause of entrepreneurs’ headaches. Last year, 28 000 pages of new acts and regulations were created. However, regulations are prepared hastily and are often MP drafts, which means that they do not go through the procedure of social consultations – as a consequence, their quality suffers: they are imprecise and require amendments.
Overdue administrative procedures – the fourth and final face of Polish bureaucratism – is slowing down Polish economy to an astonishing extent. The average waiting time for a construction permit is 156 days and getting your money back from dishonest contractors takes almost two years in court on average. Examples can be found even in academia, as explained by Tomasz Turzyński, of the Center for Innovation Management and Technology Transfer of the Warsaw University of Technology, co-organizer of this year’s Polish Economic Congress. – Scientists are discouraged when faced with administrative decisions that seem to be made chiefly with the convenience of the administration in mind – he explained. – As a result, scientists turn to other activities, such as publications.
According to Employers of Poland, Grant Thornton and the Center for Innovation Management and Technology Transfer of the Warsaw University of Technology, creating new regulations answering current needs, rather than constantly amending currently existing ones should be the way to go. Administration should also reward employees for their efficiency and not for work experience, which is sadly a common practice now.