Tax issues concern for steel union chiefs
Trade union leaders are concerned that when the government merges five steel mills to create Polish Steel (PHS), the conglomerate will only pay local taxes in the city where it is registered. This will deprive local authorities of funds needed to stem the effects of growing unemployment.
The government plans to restructure the steel industry by transferring the assets of five mills, Huta Katowice (HK) and Huta Tadeusza Sendzimira (HTS), Huta Cedler, Huta Florian (HF) and Huta Czźstochowa into holding company PHS in the first half of next year. A majority stake in the company will then be offered to two multinational steel concerns, LNM Holdings, which is registered in the Dutch Antilles, and a consortium of Arbed of Luxembourg, Usinor of France and Germany's Thyssen Krupp Stahl.
"If the headquarters of PHS were to be in Warsaw, all the taxes paid by the company will go to Warsaw," said Stanisław Szrek, deputy head of the Solidarity trade union at HK. He said that following the restructuring of the coal and steel industries, which include the closure of the Paryż coal mine and the restructuring of steel mill Huta Bankowa, HK is the major taxpayer in Dąbrowa Górnicza, where it is registered as a company. Szrek was tight-lipped about how much tax HK pays to the Dąbrowa Górnicza local authority.
With an unemployment rate of 22%, significantly above the national average of 16.4%, Dąbrowa Górnicza relies heavily on HK for taxes used to fund welfare benefits and housing subsidies to the unemployed. "The trade unions and the citizens of Dąbrowa Górnicza will not sit back and watch our taxes go to Kraków or Warsaw," Szrek said. "Each steel mill should pay local taxes to the city where it is located."
Unemployment in Świźtochłowice, the home of HF, reached 22.7% in September and has grown steadily following the mill's restructuring. In the early 1980s, HF employed around 6,000 people compared to 1,146 this year, and unofficial sources said the workforce could be slashed to just 700 following the creation of PHS. "As fewer people work in the company, the city receives less in taxes," said Zbigniew Nowak, head of the Huta Florian Worker's Union (ZZPHF). "As people lose their jobs, they apply for welfare and rent subsidies that the city can't afford."
Greg Goodale
