A Polish employers’ association is warning that urgent legislative changes are needed to prevent mass closures of micro-enterprises, vital to the nation’s economy and employment.
Micro-Firms on the Brink
Micro-enterprises, a significant component of the Polish economy, are facing a critical situation. The Employers of Poland association has launched a nationwide campaign, “9 Concrete Steps for Micro-Firms,” warning that without immediate legislative changes, the smallest businesses will disappear en masse, particularly in smaller towns.
Legislative Proposal to Ease Burden
The campaign is accompanied by a draft law aimed at reducing burdens and halting the liquidation of businesses.
Micro-Firms: Pillars of the Polish Economy
Economic data clearly shows that micro-enterprises are not marginal to the Polish economy, but fundamental. They account for 28.2% of Poland’s GDP, surpassing large enterprises, which have a 22.6% share. This means that nearly one-third of every złoty generated in the economy comes from the smallest firms.
Employment Hubs, Especially in Regions
The role of micro-firms in the labor market is even more significant. This sector provides over 4.3 million jobs, often in regions where large plants or service centers do not operate. In many smaller towns and villages, micro-enterprises are the only source of employment and income for local communities.
Dominance of Small Businesses in Poland
The structure of the Polish economy is largely based on small businesses – micro-firms comprise as much as 96% of all economic entities. Experts emphasize that this is not a sign of weakness, but an adaptation to a dispersed market dominated by local services and trade.
Costs and Bureaucracy Crippling Micro-Firms
According to representatives of the Employers of Poland, the biggest problem for micro-entrepreneurs is not a lack of customers, but rising administrative and tax burdens. The legal system often treats sole proprietorships the same as large enterprises, leading to disproportionate costs.
Unequal Regulations Favor Large Players
Cezary Kaźmierczak, President of the Employers of Poland, points to a fundamental inequality: “often small firms have more value for a region than one gigantic plant.” He believes that current regulations favor the largest players, while burdening the smallest with costs that effectively block development.
Technological Changes Add to the Pressure
Technological changes exacerbate the problem. While micro-firms quickly adopt solutions based on artificial intelligence or automation, they must also operate in a complex regulatory environment. As a result, some entrepreneurs are abandoning their businesses or moving them into the shadow economy.
“9 Concrete Steps” as a Response to the Crisis
The legislative proposal presented by the Employers of Poland includes nine key solutions divided into four areas. The first concerns reducing burdens related to employment. The organization proposes that sick pay be funded by the Social Insurance Institution (ZUS) from the first day of incapacity for work, and that the period of sick leave does not affect the accrual of vacation time.
Tax System Reform and VAT Thresholds
The second pillar of the changes involves reforming the tax system. A key proposal is the introduction of a single, flat tax rate of 3 to 20%, which would replace personal income tax (PIT), ZUS contributions, and National Health Fund (NFZ) contributions. Additionally, the VAT exemption limit is to be raised to 500,000 zł, and reporting obligations are to be reduced.
Simplifying Labor Law and Bureaucracy
The third area concerns simplifying labor law, including the elimination of some regulations and the simplification of occupational health and safety (BHP) regulations and working time records, which currently generate excessive costs for the smallest firms.
“One In, Two Out” and Data Sharing Principles
The fourth block focuses on reducing bureaucracy. Proposals include the “one in, two out” principle, whereby the introduction of a new obligation would be linked to the abolition of two existing ones. The “once only” principle, meaning data is provided to the administration only once, and a limitation on the number of simultaneous inspections are also proposed.
Financial Realities and Entrepreneurial Risk
Research conducted with Maison & Partners shows that the financial situation of many micro-firm owners is far from stable. One-third of entrepreneurs earn income not exceeding the national average, and 42% spend their earnings solely on current expenses.
Sacrifices and Satisfaction Among Entrepreneurs
Many entrepreneurs do not take sick leave – often out of fear for the continuity of their business. At the same time, as many as 47% of business owners declare that they are supplementing their business with their own savings, indicating that running a business can be more risky than stable employment. Paradoxically, despite these difficulties, 75% of respondents report satisfaction with running their company, but almost half admit that, under current conditions, they would consider returning to employment.
Consequences of Micro-Firm Closures for Small Towns
Experts warn that the liquidation of micro-firms has consequences that extend beyond the economy. Each closure of a local business means the loss of services, jobs, and the weakening of social ties, particularly in small towns where economic activity is dispersed and based on local relationships.
Regional Disparities and Economic Slowdown
Cezary Kaźmierczak emphasizes that the marginalization of micro-enterprises could lead to a concentration of development solely in large agglomerations, potentially exacerbating regional inequalities and slowing down the growth of the entire economy.
Public Awareness Campaign
The Employers of Poland’s information campaign has broad reach and covers the largest cities in Poland, utilizing large-format screens in Warsaw, Łódź, Katowice, and Gdańsk, as well as mobile billboards traveling through the streets of the capital. Intensive communication on social media is also a key element of the campaign.
Employers of Poland: Advocating for Business
The organization, operating since 2010 and representing over 23,000 companies, emphasizes that its goal is to improve the conditions for doing business in Poland. It believes that without rapid legislative changes, micro-enterprises – described as the “invisible engine of the economy” – may gradually disappear from the market.
