Last week Minister Jacek Sasin announced a new windfall tax in mass media. Such additional tax would amount to 50% and would be imposed on companies with 2022 gross margin higher than the averaged gross margin for 2018, 2019 and 2021.
This brought an immediate effect: PLN 40 billion evaporated from WSE and the Polish zloty exchange rate plummeted.
In response to a strong criticism, Minister Sasin defends his idea by saying that this is to be a levy on margins which drive inflation rather than on profits. According to him, the very idea of the windfall tax also fits in the European Commission proposal.
Indeed, the Commission put forward proposals to reduce profits, but only for electricity producers not using the most expensive material, namely gas. The Commission proposal applies to electricity producers using technologies with lower costs, such as renewable energy sources, nuclear energy, which supply electricity to the grid at a cost lower than prices set by more expensive marginal producers.
The Commission presented mainly two measures. The first one is to set the inframarginal revenue cap at EUR 180/MWh, any lower revenue was to be collected by governments of Member States and intended for assistance to reduce bills for energy consumers. The other measure is a temporary solidarity contribution on excess profits made in the oil, gas, coal and refinery sectors which are not covered by the cap on inframarginal revenue.
The “inflation tax” proposals made by Minister Sasin are going much farther than the EU concepts. It is worrying that this proposal is not flatly rejected by the chancellery of the Prime Minister. According to press leaks however, the chancellery is sceptical as to who would pay the new levy: all big companies or some specific sectors (e.g. energy companies and banks).
Let us emphasise that at present there is no proposed law in this respect. This means however that law can be proposed especially as there is no strong opposition. To prevent any unpredictable developments, chambers of commerce and industry, the business circles and advisors should promptly urge the Prime Minister to abandon such local activities as regards the Commission plans and to guarantee the stability and safety of the Polish investment market.
We will keep you posted on further developments on the windfall tax.
If this issue pertains to your business and you are interested in our assistance, please contact us.
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