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Poland to raise $2.75b with energy windfall tax

26 Sep 2022 00:00:00 | Update: 26 Sep 2022 00:48:12
Poland to raise $2.75b with energy windfall tax
Aerial view of a coal mine in Bogdanka, Poland – Reuters Photo

Poland expects to raise 13.5 billion zlotys ($2.75 billion) from a windfall tax on energy companies, the state assets minister said late on Saturday, with the money used to offset the impact of rising bills on households.

Russia’s invasion of Ukraine has triggered a global energy crisis that has sent energy bills soaring and left many households struggling to cope ahead of the winter.

“Yesterday, I sent a solution to the Prime Minister @MorawieckiM regarding the taxation of extraordinary profits of State Treasury companies and private enterprises,” Jacek Sasin wrote on Twitter.

“The estimated budgetary contribution is 13.5 billion zlotys, which we will spend on mitigating the effects of rising energy prices.”

Prime Minister Mateusz Morawiecki has repeatedly said that excess profits resulting from soaring energy prices should be shared with consumers and has called for change across the sector.

“Today we have a situation where the price for next year delivery is sold on the commodity power exchange, using the price of coal in the Netherlands - and not on the price of coal that is bought by power plants from Polish mines ... We do not agree to this,” he wrote in a Facebook post on Saturday.

On Friday, Sasin said he would present proposals that would introduce maximum electricity prices for “sensitive entities” such as schools, hospitals and local authorities.

In a letter published on Twitter, Sasin proposed a maximum price of 618.24 per megawatt-hour (MWh) for these consumers, an increase of 40per cent on 2022.

Poland has already taken a series of steps to help consumers, such as tax breaks and fuel subsidies for households. The country plans to freeze household electricity prices in 2023 at current levels for up to 2,000 kilowatt-hours.

It also plans aid for energy intensive companies worth 17.4 billion zlotys between 2022 and 2024.