Income tax revision not a bad idea -- Kozminski University experts

In spite of the decision on Wednesday by the Ministry of Finance to cancel its plan to implement a all-in-one tax for everyone, a group of experts who conducted an extensive study on taxation in Poland found evidence that a simplification of the country's tax system would benefit small business owners. "Entrepreneurs who are now covered by the PIT should be taxed in a completely different way," said one of the study's authors, Robert Zieliński, from the Kozminski University's Department of Financial Law and Tax. Zieliński and his team acknowledged that this in itself would not be simple, because it would imply creating new laws concerning the tax ratio of income, for instance a law to regulate the taxation of personal income, another to regulate that from business activities, and a third for taxes applying to income from capital and property. The team proposed a re-writing of the tax laws, including Act on PIT and CIT. Nevertheless, the team reported that the current regulations concerning the taxation of income are too complicated, inefficient and inconsistent. They said that a simplification of the income tax, especially for the performance of the business, is necessary. "For example," said Zieliński, "in the case of taxation of natural persons engaged in non-agricultural business, you need to consider the cost category deductible, which greatly complicates the principle of burden."  Today the legal structure of these costs is very complex, difficult to use and is one of the main sources of disputes with tax authorities, therefore for small entrepreneurs eliminating them could make sense, the team reported. "You would have to consider whether or not to tax these companies assuming a fixed amount of tax you pay each month, independent of the losses incurred or earned income...or leave the current system for large enterprises and introduce a flat-rate tax for smaller businesses," they added.