Deregulation remains one of the most significant challenges for the Polish economy. Simplifying regulations and reducing bureaucracy are factors that can contribute to increasing the competitiveness of Polish enterprises and improving business conditions, according to analyses by the Business Centre Club. The need for deregulation and a stable tax system was highlighted by entrepreneurs honored at the finale of the 32nd edition of the Polish Business Leader competition, organized by the Business Centre Club.
“We are counting on deregulation. The benefits are numerous, primarily time savings. Larger companies have advisors who help them navigate deregulation issues, whereas smaller businesses spend a lot of time studying regulations. The second issue is costs. The more complex and numerous the regulations, the higher the internal and external costs of business operations. The third issue, which results from these benefits, is cost savings and more time for management, decision-making, business planning, and efficiency analysis,” says Dr. Jacek Goliszewski, President of the Business Centre Club, in an interview with Newseria agency.
BCC experts emphasize that deregulation is one of the most critical challenges for the Polish economy. Simplifying regulations and reducing bureaucracy can enhance the competitiveness of Polish businesses and improve economic conditions. Deregulation is not only a demand of entrepreneurs but also a prerequisite for accelerating economic growth and increasing investment in Poland. Given the challenges posed by the current state of public finances and the economic slowdown in the EU, the efficient implementation of announced reforms is crucial.
“The priority is to create a coherent, transparent, and predictable tax system,” emphasizes Dr. Jacek Goliszewski. “The second issue is the entire reporting system that businesses must provide to tax offices—there is too much of it, and it is very burdensome. The third issue is an appropriate vacatio legis so that we are not surprised by sudden changes.”
According to the “Legal Barometer” report by Grant Thornton, nearly 250,000 pages of new regulations were introduced in Poland between 2014 and 2023. The 20 most important laws regulating business operations were amended 1,189 times, increasing their volume by 53%. In 2023 alone, 34,400 pages of new laws were passed, and 1,604 modifications were made to business regulations. The vacatio legis for tax laws reached a record short duration of just 31 days.
“We still have a problem with declared law versus applied law. There is no simple answer to this issue. I believe that the business community, which engages with politicians, is well aware that there is still significant room for improvement in the conditions under which Polish entrepreneurs operate,” highlights Prof. Dr. Hab. Ewa Łętowska, former Ombudsman and former judge of the Constitutional Tribunal.
The lack of legislative stability has particularly impacted small and medium-sized enterprises, which often lack the resources to quickly adapt their accounting and tax processes to new regulations.
“Only when we feel that the tax system is fair do we strive to pay taxes properly. However, if we have doubts about it, we try to reduce our tax burden. Another issue is the numerous obligations placed on entrepreneurs, such as various filings, declarations, regulations, and associated penalties. For example, in the case of tax scheme reporting, the average fine in the European Union is €50,000 (approximately 200,000 PLN), while in Poland, it amounts to 32 million PLN,” argues Dr. Hab. Adam Mariański, professor at Łazarski University and expert at Mariański Group Law & Tax Firm.
Poland has the second most complex tax system according to the Tax Complexity Index, which covers 64 countries. A report by the European Parliament from February 2023, “Overview on the tax compliance costs faced by European enterprises – with a focus on SMEs,” states that Polish entrepreneurs spend an average of 334 hours per year fulfilling tax obligations, ranking Poland second in Europe, just behind Bulgaria with 441 hours, as outlined in PwC Polska’s report “Taxes Under the Microscope: Navigating the Maze of Complex Tax Regulations.”
In 2024, there was a noticeable increase in the number of tax audits. Tax authorities focused on VAT inspections, particularly concerning carousel fraud in its various forms, as well as withholding tax (WHT), with special attention given to the proper application of exemptions and preferential rates resulting from double taxation agreements. Audits also targeted the general anti-avoidance rules (GAAR), which have been used to challenge transactions deemed artificial or lacking economic justification.
“Stronger government intervention is also needed, not only in legislative matters but especially in the practice of law enforcement. The introduction of rules for resolving ambiguities in favor of taxpayers, which I advocated for over 15 years ago, has changed nothing—tax authorities still resolve doubts against taxpayers. Therefore, it is essential to have someone who will explain to officials that they serve the citizens, in this case, entrepreneurs, and must create solutions that are business-friendly rather than bureaucracy-friendly,” argues Prof. Adam Mariański.
Prime Minister Donald Tusk recently proposed that entrepreneurs develop a set of deregulation proposals for the Polish economy.
“The proposed approach for the deregulation task force, in which BCC participates, is certainly justified. However, the Prime Minister spoke of deregulations that can be changed by regulations. For us, this is insufficient; we believe that deregulation should also cover statutory laws,” asserts Dr. Jacek Goliszewski.
“If deregulation is treated seriously and not as a political tool or a means for someone to gain political capital, then there is a chance for success. However, it must be done professionally, not merely as a propaganda exercise,” adds Prof. Ewa Łętowska.
The Ministry of Development is also working on various solutions to improve business conditions. In January, a draft law on amending certain acts to deregulate economic and administrative law and improve the principles of drafting economic laws was submitted for review by the Permanent Committee of the Council of Ministers. However, work on the legislation has been delayed, and the draft was only published in April.
“Law is not just about changes—this is a common misconception. What matters is changing the functioning of the law,” emphasizes Prof. Ewa Łętowska.
BCC representatives note that, despite delays in the deregulation law, a positive development in 2024 was the initiative to amend the rules of the Polish Parliament. In line with the milestones outlined in the National Recovery Plan (KPO), authorities decided to implement procedures aimed at improving legislative work quality, particularly for non-governmental initiatives.
The introduced changes require mandatory public and expert consultations, a minimum 30-day period for these consultations, and detailed regulatory impact assessments comparable to those of government projects.
“We must place much greater emphasis on three aspects: increasing dialogue, meaning discussions with the groups affected by legal changes; ensuring a proper vacatio legis so that businesses have time to prepare for changes, implement necessary procedures, and adapt their systems; and enhancing the assessment of the regulatory impact of specific laws or projects,” stresses Dr. Jacek Goliszewski.
The need for regulatory improvements was emphasized by the entrepreneurs awarded at the finale of the 32nd edition of the Polish Business Leader competition, organized by the Business Centre Club. During the gala, the Golden Statuettes of the Polish Business Leader were awarded for the 32nd time—a prestigious honor recognizing enterprises and managers for outstanding economic achievements, ethical business practices, and corporate social responsibility.
This year’s BCC Special Award winners were Prof. Ewa Łętowska and Jerzy Owsiak. Professor Łętowska was honored for her outstanding contributions to law and education, as well as her significant role in upholding civil rights and fostering a civic society in Poland.
“This award is not for me; it is for the values I have dedicated my life to—the proper role of law in society, a role that is honest and not reduced to a mere tool of repression. Law should provide freedom for individuals and businesses to thrive,” explains Prof. Ewa Łętowska.
