Polish lower house approves windfall tax on fuel companies

Poland’s lower house of parliament on Friday approved government legislation introducing a windfall tax on fuel companies, including state-controlled energy giant Orlen, in a move aimed at capturing what the government describes as extraordinary profits generated during periods of market disruption.

The bill was passed by the Sejm with 231 votes in favor, 201 against and one abstention. It will now be considered by the Senate before being sent to President Karol Nawrocki for signature.

The legislation forms part of the government’s efforts to implement European Union rules requiring member states to levy temporary contributions on companies in the fossil fuel sector that benefited from unusually high profits following the energy crisis triggered by Russia’s invasion of Ukraine.

Government supporters argued that energy firms that recorded exceptional earnings during the period should contribute more to public finances and measures designed to cushion consumers from the effects of high energy prices.

Opposition lawmakers criticized the proposal, warning that additional taxation could discourage investment in the energy sector and reduce the competitiveness of Polish companies.

Orlen’s role in the economy and its business practices have become recurring points of contention between the government and the opposition. Critics of the previous Law and Justice party administration accused Orlen of using pricing policies for political purposes, allegations rejected by former company executives.

If approved by the Senate and signed into law, the tax would add Poland to a growing list of European countries that have imposed special levies on energy companies in response to windfall gains generated during the energy crisis.

• Poland's lower house of parliament
• President Karol Nawrocki for signature.