Polish small & medium exporters 2018

I love Poland. It may sound lofty and pompous, but it is true. Poland is my place on Earth, so I care about its development and image. In my work with entrepreneurs I came up with a few economic thoughts, which I would like to share, hoping that they would find fertile ground and initiate processes that could improve the current situation.

The economic balance with our neighbouring countries is one of the most important factors of economic development, which in turn is the basis for the development of all other elements constituting the state. If it is significantly positive, i.e. the amount of money obtained from the export of goods and services is greater than the amount of money spent on imports, then our country will get richer, and arouse admiration. The strength of our economy lies in the SME sector. Every next government speaks about it. But what are we doing to promote and support this crucial part of the economy? In my opinion, nothing, or even quite the contrary. Currently the sector is crushed and develops much slower than two years ago, against the populist assurances of support. Please note that the number of companies declaring bankruptcy has increased by 30%, and an increasing number of closed companies is added to it. It is high time to ask ourselves: why?

Is it just about the unstabilised tax regulations for entrepreneurs?

Of course, but not only.

The Polish SME sector is terrorized by a sense of insecurity.

In addition, there is a lack of State support for entrepreneurs experiencing problems. In particular, it applies to real support for problems that Polish companies are facing on foreign markets.

Double taxation, for example. On the one hand, there are agreements allowing to avoid double taxation, and on the other hand, when the entrepreneur is taxed by the state which they perform the service in, they have to deal with the problem themselves. They cannot count on the state’s aid. There is no office that could offer such help. Poland does not enforce compliance with these agreements by the other party.

Creating a new structure, such as PAiH (Polish Investment & Trade Agency) or ZBH (Forein Tarade Offices), takes time, and because of the cancellation or destruction of the structures that Poland already has had, we have lost those specialists who could realistically support Polish entrepreneurs on export markets. Norway, Sweden or Ukraine are the perfect examples in this case.

It is important to plan new regulations in a way that they are friendly to Poles, and not perceived as a threat. Thanks to this the entrepreneurial and creative (in a positive way) Nation will be able to fully use its potential. These features distinguish us from fossilized western economies that are currently being suppressed by the sense of threat that the PiS government is attacking us with.

There has been a drastic change in the attitude of public offices towards entrepreneurs and citizens. Intensified inspections destroy businesses and increase the infrastructure costs. First of all, the costs for the State to maintain a huge number of officials are rising, and secondly, the inspection processes paralyze the operation of companies. For SMEs, even an inspection which does not demonstrate non-compliance with the regulations may cause, and often results, in a business failure, or discourage the entrepreneur from doing business.

Very often I meet with officers stating: ‘I have to find something, I was given such guidelines’ – it differs tremendously from the approach of the same controllers just from a few years ago. At that time, such inspection was a kind of an audit allowing the entrepreneur to analyse the mistakes they made, track the imperfections and, when adjusted, to function even more efficiently.

Reaching into the pocket of the SME sector by imposing fines and raising taxes in order to patch up the budget gap will result only in the sector discouragement, the escape of some entrepreneurs to other States, and the retention of investment processes. The means and stability are needed for investments, after all.

Consequently, the revenue from this sector does not increase as before. The slowdown in growth may even be a sign of impending downward trend, and if so- it would be an economic disaster.

There is a very wise maxim in doctors’ profession – ‘first, to do no harm’: is it not possible to adopt a similar rule in order to strengthen our SME sector?

FIRST, NOT TO INTERFERE - business owners, well-qualified management boards, our managers and executives are Polish national treasure. If we do not place roadblocks in their ways, they will manage well and present the power of Polish business in markets around the world.