Wednesday, 23 November 2011

Selling old magazines - OK or not?

And lo, upon TVN Fakty did they show the Authorities cracking down upon the Small Man and the Small Woman trying to make a living by selling clothes and things upon the highway side. And the Authorities liked not that these people be engaged in commerce without letting the State share in the trade. Mayors from Kołobrzeg, Łódź and Kraków explained that 'dziki handel' makes their streets and pavements look bad. And the Small People wept; for they have no other way with which to sustain their families. The Authorities seized boxes of clothing from the Small Man, sealed them and sent them even unto the Courts of Law.

The real reason for this high-profile clampdown is not to bring beauty and order upon the pavements of the land; it is so that Poland can be seen by the Ratings Agencies, the European Commission and the bonds markets getting tough on non-payers of VAT. Now, given that some 45% of all revenues flowing into the Polish state budget comes from VAT, squeezing out the non-payers from the market makes very good sense. Tough on the Small Man and the Small Woman, but they have for years been squeezing the revenues of the people one notch above them on the food chain who do pay VAT, do pay ZUS on their employees, do pay CIT on corporate profits. Tough on the customer of the Small Man and Small Woman; but their savings have been bypassing the state treasury and thus contributing to the budget deficit and to public sector.

Which as we can see from the experiences of Greece is not a good thing.

So. This evening, waiting for my train at W-wa Śródmieście, I noticed my favourite second-hand magazine stand was closed (below). Clampdown? These stands are the bane of Poland's publishers. Some types of magazine - classified ads, for example, have a shelf-life measure in days. But many hobby mags for example - cycling and photography being my two interests - can be bought months later without deleterious effect. Knitting patterns, computers, military history, motoring - likewise.

The process works like this. Magazines appear originally on news stands on a sale-or-return basis. What does not get sold in Ruch, Relay, Kolporter or InMedio ends up in recycling bins. As the retail price of waste paper is 30 grosze a kilo, while a magazine can get re-sold for 2zł - 5zł (depending on how old it is, how expensive it was), it makes sense to bring the old copies back onto the market.

Among the unsold months-old Uwarzam Że and Nowe Państwo magazines lie gems (English-language titles among them) for a fraction of their former price. Of course, no VAT goes to the state coffers, because what's 23% of the input cost if the input cost is zero?

My speculations about whether the Straż Miejska and Urząd Skarbowy had raided the bowels of W-wa Smródmieście came to an end when a few minutes later the shutters went up and it was business as usual (below).

Below: As you can see, a wide selection of titles on sale, very modestly priced to sell, buy one, get an even older one free - but nary a VAT receipt to be seen.

Below: And another such stand, this one on Platform 2. No doubt PKP Nieruchomości that rents out square metres in the innards of its subterranean passages (same thing goes on at W-wa Wschodnia and Zachodnia) is not too fussed about the fiscal niceties as long its revenues roll in.

With Germany unable to sell of its bonds today, we can see that Europe really is in trouble. Yet Poland has a sufficiently big grey economy that if were to be made to pay like the rest of the retail and distribution sector, budget deficits could be patched up. But sights like those above cannot be seen in Germany or Britain (what would W.H. Smith and John Menzies say?). If Finance Minister Rostowski can muster the state to force the VAT- and excise non-payers to contribute, Poland could pull itself up both fiscally and civilisationally.

This time two years ago:
Warsaw's woodlands in autumn

This time three years ago:
Still here, the early snow

This time four years ago:
Another point of view


kubala said...

I doubt it is all about taxes. Old lady selling flowers will not rescue our budget.

It is all about people illegally selling stuff on streets. Most of them get quite a lot of money from such activity (many of them hire people to illegally sell their stuff in different parts of a city) and that is because they can sell their stuff in very busy parts of a city (which means city centers). Other sellers have to go to 'rynek', pay a fee for being allowed to sell there, etc.

War with illegal sellers is already on for more that few years. So far we had no law that was forbidding such thing. Now we have. Some time ago in Łódź, there was well organized 'company' that every singe day was dropping/picking up illegally hired people and goods for sale in the busiest parts of a city.

Should I mention that this looks ugly when few meters from Wrocław's Main Market Square someone sells cheap underwear straight on a street?

TeflSecretagent said...

I don't think it looks ugly to have street sellers - it adds a character and a vibrancy that I would certainly miss. And I like buying my socks off the street, saves me having to go into a shop and search for them, I can just pick them up as I pass!

kubala said...

@TeflSecretagent: C'mon! Does that: adds a character and a vibrancy?

If you like buying on a open air - 'rynek' is definitely place for it. Not a street and not a sidewalk.

Anonymous said...

Poland has too many regulations which are not followed or badly drafted rules allowing people to get round the regulations - fruit seelers paying no taxes, ugly street advertising everywhere, no zoning regulations in cities makes this a cheats paradise - well drafted laws rigorousy applied would make living in Poland a far more pleasant experience for all. BTW when on the subject can we get rid off all grozy coins below 10?? Would free up many thousands of many years standing in lines across Poland

Anonymous said...

Old magazine stalls sell more than new stalls. If all is on sale or return why buy new - taxman loses out as well as the copyright of the authors. Is this not also known as Piracy?