The Polish government has published the full draft of its windfall profit tax on fuel companies. The tax rate is set at 75% of revenues exceeding a defined threshold, and it will apply retroactively to income earned from March 1, even though the law takes effect on August 1.
The project clarifies several previously unclear aspects of the new levy. Contrary to its name, the tax is calculated on revenues, not net profits. The portion of revenues that exceeds a “permissible” level – determined by a formula in the bill – will be subject to the 75% rate.
– The tax is levied on revenues, not profits, which is a crucial distinction – explained Rafał Hirsch, an economic journalist covering the legislation.
Retroactive application raises constitutional concerns
The law is scheduled to enter into force on August 1, but it will cover revenues generated from March 1 of this year. The government’s justification argues that the extraordinary circumstances on the fuel market warrant the retroactive effect, and that the measure does not violate the constitution. However, legal experts expect that the provision may be challenged before the Constitutional Tribunal.
– Applying the tax retroactively is highly unusual and will almost certainly face a constitutional challenge – noted Rafał Hirsch.
Revenue projections and the cost of state fuel subsidies
The Ministry of Finance estimates that the temporary tax will bring in approximately 5 billion złoty. For context, the government’s fuel subsidy program, known as CPN, costs about 1.6 billion złoty per month. At that rate, the new tax would cover just over three months of the subsidy’s cost.
– If the government does not want to widen the budget deficit further due to the CPN program, it should phase out the tax by early July at the latest – added Rafał Hirsch.
The draft is now open for public consultation, and the final version is expected to be submitted to parliament in the coming weeks. Market analysts are watching closely, as the measure could significantly affect the profitability of Polish fuel companies already facing volatile global prices.
Źródło: wnp.pl, Fot. PAP/Marcin Obara
