It all depends on proper taxation of gas extraction, insist Kościuszko Institute [IK] experts in their released position paper, which puts forward recommendations on designing the assumptions of a system to tax the extraction of non-conventional gas. The recommendations were developed based on conclusions of a debate, organized by the Institute and attended by Polish and foreign experts and by representatives of the business and legal communities.

 

Experts point out that it would be premature to establish a very rigid tax system. They argue that while the state must be prepared to modify the tax regime so as to maximize profit, this must be done in a way which will not discourage potential investors. IK President Izabela Albrycht says that taxation is not the only factor with an impact on the development of the non-conventional gas sector and on Poland’s investor appeal. Indeed, companies also take into account other aspects of the business environment, such as security, rule of law, Poland’s membership in the EU, this country’s economic situation, and the possibility to connect to a transmission network through which to export gas to EU markets. Marcin Matyka (DLA Piper) points out that nowhere in the world is there a tax system dedicated to shale gas extraction.

 

Accordingly, it is a mistake to quote in this context the cases of Norway and the United Kingdom, the solutions in place there having been developed with conventional exploration and extraction methods in view. Chief National Geologist Professor Mariusz Orion-Jędrysek considers the tax system currently in effect unsatisfactory, on the grounds that since until now only Polish economic actors have been involved in energy sources extraction in this country, the taxation system was designed to ensure low-cost energy sources for the home market.

 

Source: Gazeta Finansowa, 20 January 2012, p. 43, by Radosław Konieczny