Every fifth Polish zloty goes untaxed
About 19.5 per cent of Poland’s national Gross Domestic Product (GDP) is generated in the grey sector, and is therefore untaxed, the Polish media reported in March 2014 making reference to a report by the Institute for Market Economics.
“The shadow economy has numerous forms, and includes criminal activity, smuggling, drug trafficking, illegal gambling, etc.,” Bohdan Wyznikiewicz, vice-president of the Institute, told Polish daily Rzeczpospolita on March 12. “But above all, it includes the regular trade that people and companies attempt to hide due to too high financial burdens and excessive regulations,” Wyznikiewicz added.
The shadow economy has a negative impact on the honest companies that pay taxes and respect all the relevant regulations. These are forced to increase the price of their products and services, as they suffer higher expenses than their dishonest competition. The competition, which in a large number of cases, would never be able to continue their business activity should they decide to operate fully legally.
The Institute estimates that the total value of this year’s trade exchange, which will not be subject to taxation may be as high as PLN 350 billion. This translates into some PLN 30 billion unpaid taxes that the Polish government does not manage to collect in due taxes.
According to the Institute, the situation in Poland has improved, as the percentage of Poland’s GDP last year that was covered by the shadow economy was higher than now and equalled to 19.9 per cent.