TAXATION OF SHALE GAS EXPLOITATION IN POLAND AND ITS IMPACT ON ECONOMY IN THE LIGHT OF THE „RESOURCE CURSE”

Abstract

The article discusses the rationale and methods of taxation of hydrocarbons, particularly shale gas, and then the impact of the relevant fiscal measures on the economy in light of the concept of the “curse of natural resources”. From a legal point of view, there are two systems of taxation of natural resources, namely the concession and contractual systems. Exploitation of natural resources is subject to various taxes and charges, the most important of which are: license fee for the volume or value of extraction, a special tax on profits and joint production contracts. International experience shows that the relevant tax systems are very diverse, and this diversity reflects the different stages of exploitation of resources and various institutional environments. Against this background, Polish proposals for changes to the taxation of hydrocarbons, particularly shale gas, seem to be well adapted to existing realities. In addition to the modifications to the existing taxes, the new proposals include the introduction of two new taxes: a tax on mineral extraction and a special hydrocarbon tax.

As shown by the experience of other countries, additional revenues from exploitation of natural resources may, in certain circumstances, contribute in the longer term to adverse economic phenomena, collectively known as the “curse of natural resources”. The key issue here is to study how the new resource revenues will be used: to increase consumption or rather investments and whether or not they adversely affect the long-term public finances and competitiveness of the economy. From this point of view, the most important success factors are the quality of public institutions and the maturity of the political elites. These comments are also valid in the case of shale gas extraction in Poland. An additional risk factor may be excessive expectations regarding shale gas benefits. The prospect of additional budget revenues and significant improvement in the balance of payments may lead to discontinuation or slowing down of the necessary fiscal and structural reforms. In a sense, a country can fall victim to resource curse, even when not exploiting them on a large scale.