Taxing ad revenues stops economy's driving force: the entrepreneurs

Entrepreneurship Council expressed a firm protest against the government's draft which provides for additional taxation of advertising revenues. Employers are warning that the implementation of the project in its current form will have a highly negative impact on the entire economy and will bring multi-billion losses instead of the assumed additional revenues.

"In the market economy, it is widely known that advertising is a lever of trade. The advertising market is one of the most important driving forces of the economy. Limiting advertising will reduce consumption, which is at its lowest in years. And consumption directly affects the GDP," the letter reads.

According to Deloitte's calculations for the World Federation of Advertisers, in the EU, each PLN 1 spent on advertising translates into PLN 7 of GDP growth

According to the Council, the planned tax burdens will affect all entrepreneurs, and consequently also citizens. The introduction of such burdens in the middle of the fiscal year, contrary to the rules established for years - and at a time when the pandemic continues to strangle the economy, will be counterproductive. 

"The calculations of the Ministry of Finance, according to which additional taxation of advertising revenues would bring PLN 800 million in 2022, are incorrect, as they do not take into account the negative effects of the proposed solutions in the form of reducing GDP. Losses on VAT, PIT, and CIT will many times exceed planned revenues from the new tax and may reach PLN 6 billion," the entrepreneurs stated. 

(WBJ)