Tuesday, March 22, 2016

Lump sum VAT for small taxpayers. Experts evaluate the proposals of the Ministry of Finance – Money.pl

The Ministry of Finance is considering the introduction of a simplified, flat forms of taxation for small taxpayers. As for the entrepreneurs who achieve an annual turnover of 150 thousand. zł, bringing very low budget revenues. Experts asked by money.pl comment, praise reasoning ministry officials, but warned that the devil is in the details, because traders can lose on the changes.

As reveals the Finance Ministry, the entrepreneurs of income to 150,000 zł per year constitute as much as 51% of the number of VAT payers, or 880,000, but produce only 0.84 percent. the total turnover of VAT payers. “On balance these taxpayers pay into the budget of 121 million zł of VAT,” – emphasizes the resort.

The ministry recognizes that in addition to very low tax revenues, the motivation for these changes – if agreed to by the Commission in European – is the fact that “the status of VAT taxpayer requires the settlements, which for many taxpayers may be a nuisance.” MF is also considering raising the threshold of liability to VAT of 150 thousand. zł to 200 thousand. zł.

The devil is in the details

– As a general rule a sensible proposal, but it all depends on the details. VAT was not coined for small businesses, but as a privilege for large – says Cezary Kazmierczak, president of the Association of Entrepreneurs and Employers. – But that was in another reality, when there were boundaries, because now no VAT has no sense due to the export intra-Community, but that’s another story – he says.

– The introduction of flat-rate tax, according to the Newspeak EU called lump sum VAT is the solution as the most legitimate, but not at such a low threshold of turnover, as proposed by the government – says Andrzej Sadowski, president of the Center of Adam Smith, while a member of the presidential National Development Council – a flat-rate tax always brought the treasury of 100 percent. influence, because it is the number of times companies lump sum. Of course, assuming that the lump sum will not be set at a ridiculously high level – notes.

– Mali taxpayers more cost the state budget than it pay VAT -u – notes Andrzej Sadowski. – Taking into account the costs of controls, as well as the costs incurred by taxpayers, has long been the situation is unfavorable for both parties – evaluate.

Luke Czucharski, a tax expert organizations Employers of Poland, it is estimated that the idea MF is “worth considering”. – There is no doubt that the obligations related to the settlement of tax on goods and services are for entrepreneurs cumbersome and time-consuming – he says, noting that “due to the lack of detail, at the moment it is impossible to make a clear assessment of the proposal of the Ministry of Finance.”

This may discourage companies to increase

from a distance on the proposal of the Ministry of Finance speaks in turn Łaszek Alexander, chief economist at the Civic Development Forum. – Be very cautious in differentiating regulations for businesses of all sizes turnover or employment – he says. – The consequence of such regulations is the introduction of thresholds above which companies fall into a more rigorous regime, which might discourage them to grow – noted economist.

As an example of the negative impact of an artificially created thresholds gives France, where it is very much 49 -osobowych companies that do not want to hire another employee because – as highlights – companies with 50 employees are no longer treated as big and are subject to much more stringent regulations.

– there are studies from the UK, which show unnaturally lot of companies just below the threshold rotation VAT and a sharp decline in their numbers above – notes Łaszek. – Because other data do not show that a plunge in the number of companies with increasing scale of operations, the conclusion is clear: English companies that are close to the threshold of hiding part of revenues in the informal economy, would it not exceed – says Alexander Łaszek.

Luke Chucharski believes, however, that in addition to examining the impact of the introduction of flat-rate VAT to the budget, the designer amendment “should make a very thorough analysis of the effects that this solution will arise for entrepreneurs.” – At the moment there is also unclear whether the revenues will be the only criterion for the application of a lump sum – says the expert, adding that it provides no information on potential exemptions in question, which should be included in the project.



listen to the voice of entrepreneurs

Andrzej Sadowski assesses the current threshold for being subject to VAT, amounting to 150 thousand. zł, as “ridiculously low”. – Setting such a low threshold ensures that they will be combinations – he states. – The Ministry of Finance does not read your data, if it were otherwise, would immediately know which group, to what level of turnover should be discarded from the system of VAT, and not to create new bureaucratic establishment – he argues.

The threat to businesses which may entail the introduction of changes proposed by the Ministry of Finance, shows Luke Czucharski. – Ministry of Finance, in order to create valuable project, which ultimately did not prove harmful, should listen to the voice of entrepreneurs – calls for a tax expert.

– too many times it happened that preferred, according to the designers, the changes turned out to be a nightmare for conducting business – says Lukasz Czucharski.

Alexander Łaszek indicates the report fOR “Next 25 years”, in which it stated that in Poland there is a problem with too many micro-enterprises with very low productivity and consequently low wages. – The share of micro employment in Poland is among the highest in Europe, and in this respect, unfortunately, we are like the southern countries such as Greece and Italy – says economist. – Moreover, most of these companies to grow – he said.

– From the point of view of raising the standard of living of Poles, we should create conditions to micro enterprises grow small, small to medium and medium to large, all the while raising its productivity and thus wages – the expert believes FOR. – You must also accept the fact that the less effective will be on the road to decline. Therefore I would be very careful before making another adjustment, which will facilitate the duration of the smallest businesses, while introducing regulatory threshold, which may discourage growth – warns economist.

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