Bureaucracy costs entrepreneurs 200 bn PLN

According to entrepreneurs the biggest hindrance of the development are regulations and excessive bureaucracy.

According to the IBR 2013 survey, half of entrepreneurs perceive regualtions and the excessive bureaucracy as the biggest hindrance to development rather than economic uncertainty or investment finance costs. According to the estimates, companies’ revenues would be higher by 15 per cent if it was not for the bureaucracy problem. It would mean the revenue increase by 200 bn PLN.


Bureaucracy is intertwined with complex procedures and unintelligible regulations. Every third entrepreneur indicated that the growth in revenue would be as high as 10 per cent, provided that the main obstacles were removed. One fourth of entrepreneurs have estimated the potential revenue increase for 5-10 per cent – says Tomasz Wróblewski, the managing partner in Grant Thornton. If we transfer these estimates on the economy level, then the elimination of the bureaucratic barriers would increase revenues of polish entrepreneurs by over 200 bn PLN. This is roughly one-eighth of the Polish GDP.


Entrepreneurs enumerate complexity of the Polish law (mainly the tax one), ambiguous interpretations, frequent changes in the law as well as prolonging judicial procedures as the main barriers. Ministry of Finance issues 30 000 per year. Which means that over 100 interpretations are issued per day, that is a new one is created every 4 minutes. This illustrates the complexity of the existing regulations and their ambiguity. Since entrepreneurs inqure so much about the tax law, then it means that they have serious problems – comments Tomasz Wroblewski.


Entrepreneurs were also asked about the consequences resulting from the existing barriers. As Grant Thornon informs, the bureaucracy is primarily the waste of time and higher costs. Engaging both the resoursces and the time cause that the there is less time and resources for the undertakings. In this way, the bureaucratic barriers indirectly lead to reduction of energy for development of the enterprises. One intwo entrepreneurs is willing to abandon a development undertaking, only to avoid struggle with osbtacles and administrative risk. This is a grave result – observes Tomasz Wróblewski. 


Moreover, entrepreneurs would willingly agree on liquidation of tax relief in exchange for a simplified system, in which the tax scale would be the actual scale and not only an entry in a bill. The wide catalogue of expenditures not considered as tax deductibles leads to a situation in which the actual encumbrance is higher than the legislative change – says Tomasz Wroblewski.


Bureaucracy harms the innovativness and solving the problem is not easy. In theory, a cooperation between business and administration to develop a siolution would suffice, however, it is highly unlikely. In the first place, it is not an easy subject. Secondly, I think that it is the matter of the government priorities, and unfortunately for entrepreneurs the economy is not the apple of administration’s eye. This low priority probably results from politicians’ conviction that they have much more important tasks and objectives – states Tomasz Wroblewski.


As expert says, introduction of the civil servants’ financial liability for their decisions did not produce the expected results. The statistics speak for themslevs. We did not have any isntances of proceedings against civil servants who would issue an incorrect decision.  We have a regulations which, practically, does not work and does not bear any profit – sums up Tomasz Wroblewski.

Be the first to comment