Protozoologia w Polsce 1861–2001: L. Kuźnicki, Centrum Upowszechniania, Polska Akademia Nauk, Warszawa, 309pp, softcover

Abstract

Nowadays, an increase in the overall tax burden on mining companies is being observed as a global trend. The governments of many countries view mining companies as quite profitable, therefore they would like to participate in the revenue arising from the exploitation of natural resources by, for example, taxing the activity. Currently the share of taxes and charges in the cost structure of the mining sector in Poland is at relatively high level, amounting to 7% of total production costs. The main factors affecting this situation are obligatory fees, such as (a) geological and mining taxes and fees, (b) taxes and fees for environmental use, (c) taxes and fees associated with employees and business, and (d) a new tax on the extraction of certain types of mineral which has been levied in Poland since 2012. The overall level of tax, including new taxes and royalties, has a positive impact on public and local finances, however higher taxation levels are likely to reduce mining companies’ incentives to invest. It has to be underlined that the anticipation of taxation during the various stages of a project is a crucial factor for investors. If an investor thinks that the tax system will be unfavourable to him during the production period, there is a risk that he will not make his investment (hold-up risk). However, if the tax system is changed after investments are made, the investor no longer has any choice (Laporte & Quatrebarbes 2015). And the latter was the case in Poland for KGHM Polska Miedź SA which has been mining in Poland for over 50 years and has sufficient resources for a further 30 years and more. Therefore tax has a significant impact, both on ongoing operations and on the development of new mineral resources in Poland. It has created additional challenges as the new tax on the extraction of certain types of mineral has a non-linear character, it is several times higher than other taxes, and is only levied on copper and silver. By diminishing the profits limit it can not only decrease exploration activity, but also cause some new investment in Poland to be cancelled. The aim of this paper is to analyse the effects of taxation on resource valuation in Polish copper existing mines, and to assess the implications both from an investor's and the Government's point of view from the medium to long-term perspective.