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Poland may exempt KGHM's investments from mining tax

Published 2016-05-11, 08:05 a/m
© Reuters. Poland may exempt KGHM's investments from mining tax
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WARSAW, May 11 (Reuters) - Poland could exempt investment
outlays from a mining tax that weighs heavily on the country's
sole copper producer KGHM KGH.WA , the treasury minister said
on Wednesday, in an effort to reduce the burden on one of the
country's biggest employers.
"There's no decision yet... as far as I know the finance
minister is leaning towards a mining tax formula, which would
enable excluding new investments, which would be a big relief
for the company (KGHM)," Dawid Jackiewicz told Reuters.
The levy on mining income introduced in 2012 eats into
profit at KGHM, which is Europe's second biggest copper producer
as well as the world's largest silver miner. The company
reported a record loss last year on writedowns due to falling
metals prices.
The miner, the largest employer in Lower Silesia in the
south-west, said in December that it expects to pay around 1.2
billion to 1.3 billion zlotys ($309-$335 million) of copper tax
in this year.
Dawid Jackiewicz said that any cuts to the levy itself were
possible next year at the earliest.
"We are working on substantial limitation of the tax, which
I'm personally in favour of," he added. "It could take place in
2017. In the current situation... scrapping the tax in full is
not possible."
The ruling Law and Justice (PiS) party moved to power in
last year's elections, among other things, on a promise of
scrapping the mining levy. But the new cabinet's state budget
for 2016 envisages booking 1.5 billion zlotys from the tax.
Media have claimed the finance ministry could lower the tax
to 1 billion zlotys, but this has so far failed to materialise.

($1 = 3.8792 zlotys)

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