The government plans to impose a new tax on large-format stores, called the congestion tax. It could take effect already on 1 January 2020, Jadwiga Emilewicz, the enterprise and technology minister, said in a radio interview on 29 October. As she explained, the amount of tax would depend, not a store’s sales turnover, but the problems that it causes in the urban mix, in terms of increased congestion, road investment, or costs of infrastructure maintenance. A special formula would be applied to measure this impact, she added, without however giving any details.
Details still unknown
Since neither the formula nor the exact structure of the new tax are known yet, it is difficult to say which retailers would be hit hardest by it. Will a store’s square metreage be the main consideration? (If so, hypermarkets, DIY stores, and furniture stores would be the main losers.) Or the amount of traffic generated by it? The most popular stores, notably grocery discounters Biedronka and Lidl, would be the biggest victims under this scenario.
Nor is it clear whether different rates of tax would apply to stores in city centres and on the outskirts. (The largest stores are located on the outskirts.) Another potentially tricky issue is how to assess the impact on the urban mix of a large-format store (e.g. a food store) located in a shopping centre. Certainly it would be unfair to assume that the entire traffic around the shopping centre is generated by the store.
Another problem for retail chains
The legal environment for large retail chains in Poland has been deteriorating steadily. The government has already imposed a ban on Sunday trading, and a tax on retail sales (though the latter remains the subject of a legal dispute with the European Commission). It has also signalled plans to impose curbs on private label sales, and pledged rapid increases in the minimum wage. The congestion tax would make conditions even more difficult for many retailers.