Transition of a country from the category of developing countries to developed one is a process that takes years. The change of category is a byproduct of institutional changes and accompanying increase in the level of living. Poland has been implementing reforms moving us toward market economy and democratic society since 1989. As a result we were able to close significant part of the gap in standard of living between Poland and Western countries. It…
Decentralization in Poland was implemented in two stages – in 1990 and in 1999. The early reforms passed down central government tasks as well as some revenue-raising authority, giving it limited autonomy regarding real estate taxes, local fees, and other minor taxes.
Apart from modern enterprises competing in international markets, there are more small enterprises of very low productivity in Poland than in developed countries. FOR estimates that half of Polish GDP is produced by at most 5.6 million people.
On April 27, 2018, Civil Development Forum (FOR) presented The Bill for Government Services in 2017, which shows the structure of Poland’s government expenditures. Like every year, the current seventh edition of the campaign took place just before the tax filing deadline.
In his first parliamentary speech, PM Mateusz Morawiecki repeated many theses of the government. Some of them are wrong and contradict the experiences of other countries. Others, while right, stand in clear contradiction with the actual actions of the Polish government.
Huge levels of state ownership in the Polish economy negatively affects its productivity and growth prospects. Although the employment share of state-owned enterprises (SOEs) in total employment of the Polish economy might seem limited (about 5%), their share among the largest, most important companies is much more significant.
Lowering the retirement age is contrary to the plan of Mateusz Morawiecki, Minister of Economy, which rightly linked in one of the documents the decline in working-age population with a slowdown in economic growth. It will put a drag on catching up with the Western Europe’s living standards.
The VAT base in Poland has its weaknesses due to both domestic and EU polices. National authorities overuse reduced rates, making the VAT system too complicated and problematic for businesses while a zero rate on intra-EU trade incentivizes fraud.
Polish economic policy should aim to increase the country’s resilience and strengthen economic foundations. The safety margin, in the form of ensuring the appropriate fiscal space, must be maintained not only because of tensions in the world economy, but also in terms ofpossibly less sharp, cyclical slowdown.
The cost of payment backlogs is not limited to the cost of maintaining the liquidity of the company. In addition to the interest on bank loans, one should also take into account all the additional costs associated with the monitoring of payments from contractors, chasing late payments, and growing risks caused by the delays.