President of Employers of Poland Andrzej Malinowski has issued an open letter to Prime Minister Ewa Kopacz expressing his outrage and concern with actions taken by the tax authorities towards Zakłady Magnezytowe Ropczyce S.A.. In recent days, the Tax Control Office in Rzeszów has imposed a tax on losses of over 6 mln PLN on the company. Andrzej Malinowski stressed that Poland is perhaps the only European state to tax losses.
Ropczyce S.A. fell victim to the so-called “option tsunami”. However, they managed to reach an agreement with banks and pay back their debts. In spite of that, the tax authorities accused them of having inappropriately assessed the risk connected to the options. It is worth keeping in mind that the Ministry of Finance itself did not managed to assess this risk, as evidenced by the numerous amendments to the 2009 budget.
Dear Ms Prime Minister,
When in April I urged you to pass the amendments to the Tax Ordinance proposed by President Bronisław Komorowski as soon as possible, I did not think my predictions as to the effects of not introducing these changes would come true so quickly. Today, we are seeing the mindlessness of officials destroy yet another company that did not break the law.
The director of the Tax Control Office (UKS) in Rzeszów imposed a tax of 6.24 mln PLN on Zakłady Magnezytowe Ropczyce S.A., due to losses incurred by the company in 2009-2010 as a result of the so-called “options” – despite the fact that it managed to pay its bank debts back and maintain production. I would like to stress that we are talking about a tax on losses. Poland is perhaps the only EU state to tax losses. Just as a reminder – these losses were made possible by the government delaying the implementation of the MIFID directive which obliges banks offering financial instruments to file detailed reports on the risks resulting from the use of these instruments.
What is particularly shocking about this story is the fact that the officials from Rzeszów, who are subordinates of the Minister of Finance, believe that a company making a decision to acquire options in 2008, in order to secure itself against unstable exchange rates (the company in question exports over 50 percent of its production) – should have foreseen all the dangers and consequences of such a move, including those that stretch into distant future. Even the Minister of Finance failed to predict them in 2008 and 2009 – nobody was made responsible for the numerous corrections to the 2009 budget caused by a rapid weakening of the złoty. NIK ruled that some phenomena are unpredictable – hover, when it comes employers the Tax Control Office has a different opinion.
The tax was imposed on a well-functioning company with over 800 employees in Subcarpathia, with several thousand jobs in cooperating companies. All public and legal obligations were regulated on time and their value exceeds 100 mln PLN. Furthermore, the company’s shares are available at the Warsaw Stock Exchange. The company’s financial reports were and still are regularly checked by resected auditors and there have never been any objections.
Dear Ms Prime Minister, why is the government spending money on job creation if it then destroys already existing jobs? Maybe it would be better to move money from the Ministry of Labour to the Ministry of Finance and pay bonuses to overeager officials without destroying Polish companies? On behalf of Employers of Poland, I urge you to immediately block the senseless destruction of Ropczyce – in the interest of the state and the people who would lose their jobs. There can be approval for officials to destroy companies in what they believe to be the interest of the state. The interest of the state dictates that such people be stigmatized and fired from public service. I urge you to act quickly and decisively.
President of Employers of Poland.