Finally, a bill just for entrepreneurs
Less paper on their desks, shorter queues to bureaucrats' desks and, consequently, more time to do business. This is what the authors of a new bill, which came into effect on that day, were hoping to achieve.
The bill in question deals with economic freedom, signed by President Kwaśniewski on July 22, 2004, having been passed by parliament on July 2, 2004, replacing the old law on economic activity dating back to 1999. The 22nd of July, it is worth pointing out, was until now associated with the assumption of power by Communists in Poland and the final end of any freedom in the country, economic or otherwise. The entrance of the new bill was therefore a suitably spectacular one.
In the speech he made at the signing ceremony, President Kwaśniewski said that the bill should "lend wings" to the Polish economy. In order to facilitate this, he called on the media to propagate the contents of the new bill among the people. In view of such an explicit plea by the head of state, I decided to do my part and take a look at the new bill.
A closer look
When reading the bill, it appears as though we have been presented with, maybe not a constitution, but rather an economic mini-constitution.
According to the explanatory statement of the government bill, the new law is meant to make it easier for entrepreneurs to undertake, carry out and, nomen omen, cease economic activity. Aside from this primary objective, the bill was also meant to bring Polish regulations in line with EU requirements.
In an effort to ease the burden on entrepreneurs, particularly for small- and medium-sized enterprises (SMEs), it would appear that legislators decided to reduce the bureaucratic load placed upon them. This is done through the so-called "one window" principle: From now on, entrepreneurs are to be able to complete all procedures associated with registering, de-registering or making amendments to registration of their activity at one place. What is more, this place could be an Internet browser window - as registration is to take place electronically. The registration office will be required to complete the procedure in three days. "From now on" means from 2007, as this is when these particular regulations will go into effect, because at present the public administration's IT capacity is insufficient. Three days in three years' time - it's worth the wait.
Up to speed with the information age
We are said to be living in an information society, and information is also supposed to flow between entrepreneurs and public administration - both ways. What is more, according to the new bill, the administration itself shall assume most of the responsibilities associated with informing its relevant units about the entrepreneurs' business. The entrepreneur shall only provide input to the system, without having to worry where the information is passed on. This applies to such issues as tax information (PIT, VAT and excise) and employment statistics, which have been a hassle for many businesses, particularly those with offices in several different regions of the country.
The result, aside from obvious relief for businesses, is that rather than being mere bits of statistical information, entrepreneurs are seen by the administration as real entities.
I think that "information" is a key concept in the new bill, which is clearly based on the belief that the more people know about one another the better chance they'll understand each other well.
In carrying out its duties, the government administration is now required to cooperate with, among others, employer organizations. This approach was also visible in the way the bill itself was prepared, with a broad consultation process, involving many entrepreneur groups. This is probably the reason why the bill was well-received by businesses, although just before its approval, the Polish Chamber of Commerce expressed reservations regarding the scale of reforms introduced by the new law, pointing out that some solutions - particularly in the area of concessions and permits - only went half way.
Less big brother
Information is one matter, but the way it is obtained is quite another. The latter should not be detrimental to the business that is the subject of the study and should not cause it to incur financial losses. With this principle in mind, legislators limited the duration of audits to which businesses can be subjected to by various government bodies and generally made the audit process more civilized (up-to-date registration of results, limiting the number and maximum duration procedures to four weeks in case of small enterprises and eight weeks for medium and large ones, conditioning the possibility of carrying out more than one audit at a time upon the written permission of the entrepreneur).
Better times for business
The government appears to be putting more trust in enterprises than it has in the past, clearly believing that even without being constantly pestered by various inspections, they will be able to run their businesses in accordance with the law. This first, symbolic ray of hope for changes in the mentality of relations between the state and businesses needs to be appreciated.
The increase in freedom of economic activity is also meant to take place through freeing of the economy from the excessive dead weight of concessions and permits, by reducing the number of sectors in which they are required and limiting the discretion of bureaucrats in the process of market regulation (requiring certificates, authorization, permissions, etc).
Although little is left of some of the ultra-liberal (by Polish standards) amendments proposed by the government (such as the abolishment of concessions for air transport), the number of sectors subject to concessions was nevertheless reduced to six.
One can only hope that micro-businesses, a new category introduced in the bill, will use this suddenly acquired freedom to quickly move to the medium, large or even macro business categories.
By Łukasz Kowalczyk, legal expert at Bank Millenium SA
The bill in question deals with economic freedom, signed by President Kwaśniewski on July 22, 2004, having been passed by parliament on July 2, 2004, replacing the old law on economic activity dating back to 1999. The 22nd of July, it is worth pointing out, was until now associated with the assumption of power by Communists in Poland and the final end of any freedom in the country, economic or otherwise. The entrance of the new bill was therefore a suitably spectacular one.
In the speech he made at the signing ceremony, President Kwaśniewski said that the bill should "lend wings" to the Polish economy. In order to facilitate this, he called on the media to propagate the contents of the new bill among the people. In view of such an explicit plea by the head of state, I decided to do my part and take a look at the new bill.
A closer look
When reading the bill, it appears as though we have been presented with, maybe not a constitution, but rather an economic mini-constitution.
According to the explanatory statement of the government bill, the new law is meant to make it easier for entrepreneurs to undertake, carry out and, nomen omen, cease economic activity. Aside from this primary objective, the bill was also meant to bring Polish regulations in line with EU requirements.
In an effort to ease the burden on entrepreneurs, particularly for small- and medium-sized enterprises (SMEs), it would appear that legislators decided to reduce the bureaucratic load placed upon them. This is done through the so-called "one window" principle: From now on, entrepreneurs are to be able to complete all procedures associated with registering, de-registering or making amendments to registration of their activity at one place. What is more, this place could be an Internet browser window - as registration is to take place electronically. The registration office will be required to complete the procedure in three days. "From now on" means from 2007, as this is when these particular regulations will go into effect, because at present the public administration's IT capacity is insufficient. Three days in three years' time - it's worth the wait.
Up to speed with the information age
We are said to be living in an information society, and information is also supposed to flow between entrepreneurs and public administration - both ways. What is more, according to the new bill, the administration itself shall assume most of the responsibilities associated with informing its relevant units about the entrepreneurs' business. The entrepreneur shall only provide input to the system, without having to worry where the information is passed on. This applies to such issues as tax information (PIT, VAT and excise) and employment statistics, which have been a hassle for many businesses, particularly those with offices in several different regions of the country.
The result, aside from obvious relief for businesses, is that rather than being mere bits of statistical information, entrepreneurs are seen by the administration as real entities.
I think that "information" is a key concept in the new bill, which is clearly based on the belief that the more people know about one another the better chance they'll understand each other well.
In carrying out its duties, the government administration is now required to cooperate with, among others, employer organizations. This approach was also visible in the way the bill itself was prepared, with a broad consultation process, involving many entrepreneur groups. This is probably the reason why the bill was well-received by businesses, although just before its approval, the Polish Chamber of Commerce expressed reservations regarding the scale of reforms introduced by the new law, pointing out that some solutions - particularly in the area of concessions and permits - only went half way.
Less big brother
Information is one matter, but the way it is obtained is quite another. The latter should not be detrimental to the business that is the subject of the study and should not cause it to incur financial losses. With this principle in mind, legislators limited the duration of audits to which businesses can be subjected to by various government bodies and generally made the audit process more civilized (up-to-date registration of results, limiting the number and maximum duration procedures to four weeks in case of small enterprises and eight weeks for medium and large ones, conditioning the possibility of carrying out more than one audit at a time upon the written permission of the entrepreneur).
Better times for business
The government appears to be putting more trust in enterprises than it has in the past, clearly believing that even without being constantly pestered by various inspections, they will be able to run their businesses in accordance with the law. This first, symbolic ray of hope for changes in the mentality of relations between the state and businesses needs to be appreciated.
The increase in freedom of economic activity is also meant to take place through freeing of the economy from the excessive dead weight of concessions and permits, by reducing the number of sectors in which they are required and limiting the discretion of bureaucrats in the process of market regulation (requiring certificates, authorization, permissions, etc).
Although little is left of some of the ultra-liberal (by Polish standards) amendments proposed by the government (such as the abolishment of concessions for air transport), the number of sectors subject to concessions was nevertheless reduced to six.
One can only hope that micro-businesses, a new category introduced in the bill, will use this suddenly acquired freedom to quickly move to the medium, large or even macro business categories.
By Łukasz Kowalczyk, legal expert at Bank Millenium SA
