Poland on Tuesday proposed an amendment to its copper taxes, which would allow state-run producer KGHM to deduct up to 5% of the levy if the company donates it to local authorities, government representatives said.
The mining levy, which was introduced in 2012 and is assessed using a complicated formula based on local production volumes and prices, primarily targets KGHM, one of the world's biggest copper and silver producers. In 2017 KGHM's copper tax amounted to 1.77-billion zlotys compared to the group's profit of 1.57-billion zlotys.
The tax deduction would be allowed when donations to local government units were made -- either at the municipal, county or provincial level -- in areas where mining activities subject to taxation are carried out, the statement of the Council of Ministers said.
"A certain portion of the copper tax could be used for purposes related to the activities of local government, will be tax deductible, with obvious benefits for residents, and the money will remain in the local community," Prime Minister Mateusz Morawiecki told a press conference.
Poland holds local elections on Sunday and the copper tax, which hits KGHM - the biggest employer in the south-east Poland, was featured in campaigns preceding the general election in 2015 when politicians promised to scrap it.
"This is a part of far-reaching election promises. The government ministers, who are engaged in this campaign, make promises, promise money - this is an obvious example of political corruption," said Anna Materska-Sosnowska, a political scientist at the Warsaw University.