ETHICAL PROBLEMS IN PROFIT CREATION IN SMALL BUSINESS ENTITIES IN POLAND

The present paper analyses selected aspects of some informal practices used in the small business sector which lead to the achievement of better financial results but are in conflict with business ethics and oftentimes with law. There is presented economic model of a small business entity, which is conditioned by the tax laws applicable in Poland. Its construction creates a temptation in small businesses to use informal practices by their owners, which result in the underestimation of their regulatory liabilities, i.e. tax and social insurance liabilities - and thereby in lower payments to the state budget. The principal thesis of this paper is, there is the conflict between ethical and economic values in economic activity of small business entities.