WBJ/PKPP Lewiatan press breakfast: Business turns up the heat on PiS

Entrepreneurs and experts attending the WBJ's press breakfast to discuss what the government can do to stimulate new investment, complained about the main obstacles that investors face when coming to Poland. The lack of  decent transportation infrastructure was seen almost unanimously as the main hindrance to attracting new investors. The state of the judicial system also raised concerns along with poorly qualified staff in government bureaucracy.

The director of KPMG, Mirosław Proppé pointed out another problem: "We, as KPMG, have to promote Poland on our own. In the diplomatic institutions there are no brochures and booklets about investing in Poland," he said.

Tax tussle

Cezary Mech, PiS' financial expert and likely to be the next Finance Minister, presented the party's proposals to boost investment. "We plan tax breaks for entrepreneurs willing to increase employment. In two years zł.24,000 can be saved on one new employee," he said, adding that entrepreneurs willing to increase employment in their business can also expect to pay lower social security contributions.

Still, businesspeople attending the breakfast weren't enthusiastic about PiS' flagship investment-boosting proposal. The president of Sanitec Koło, Marek Kukuryka said that the corporate tax break is of marginal importance. "If we look at the cost of our investments in a new factory this grant is insignificant," he said. What companies are looking for, he added, are local tax breaks and the establishment of special economic zones.

Andrzej Blikle, the owner of confectionery firm A. Blikle, went even further. "The only motivation for entrepreneurs is the market, not tax breaks," he said, appealing to the future government to stop trying to make entrepreneurs happy, but rather to concentrate on creating a healthy market. Blikle also complained that the lowering of corporate tax, which at 19 percent is one of the lowest in Europe, was accompanied by raising the amount of taxable income. "So in fact the corporate tax is higher," he said.

Grant a wish

Grants for foreign investors also sparked a heated debate. Cash grants are used by Slovakia to attract investors, and Mech insisted that prospective investors request such grants in Poland.

But the chief economist of IDM, Marek Zuber, claimed that it would be wiser to create favorable conditions for doing business in Poland, both for foreign investors as well as domestic entrepreneurs. Although many agreed that grants indeed could be used to attract foreign companies, most entrepreneurs saw improvements in the quality of the law and the simplification of the tax system and administrative procedures as key to improving the investment climate.

Mech responded by confirming his party's willingness to cut unemployment, attract foreign investors and cut the budget deficit. He stepped around the issue of whether cash grants for foreign investors would be introduced and refused to offer any specific proposals as to laws to facilitate investments. "We have concrete drafts" he said. 

The WBJ's partners are Hotel Le Regina and Skrivanek Translation Services.