Czech refinery tax: Chamber of Deputies backs it in first reading

The Czech Chamber of Deputies has backed a bill on an emergency tax on oil refineries in its first reading. Opposition proposals to reject the bill or send it back to the government failed, and the document will now go to the lower house's budget committee.

The tax is to apply to companies with total annual revenue of at least CZK 2 billion and oil refining revenue of at least CZK 50 million. In practice only two operations will be affected: the plants in Kralupy nad Vltavou and Litvínov, both owned by the Orlen Unipetrol group.

The levy will be paid for this year and the next, and will apply to the margin above the 2025 level. According to the Ministry of Finance, the tax alone will bring around CZK 5.5 billion into the state budget this year. Next year's revenue can only be specified in 2027, once price trends become clear.

The opposition warns about the retroactive effect of the new tax and points out that in the Czech Republic it will hit just one player. The Ministry of Finance replies that the government drew in part on a similar measure in Poland, where a 60% tax applies to the excess portion of the margin on liquid fuel sales, with the reference margin calculated as the 2025 average plus 20%. Polish authorities expect around 4 billion zlotys from it, or roughly CZK 22 billion.

The Ústí Region Economic Chamber has also voiced its objections. It does not reject the principle of emergency taxation, but demands changes to the parameters: it considers the 2025 baseline and the retroactive effect for the current year to be poor choices. In the chamber's view, the tax could limit investment in modernizing the chemical industry, as well as employment and the competitiveness of regional firms. Moreover, it effectively affects the country's only refinery operator, while foreign fuel importers face no comparable burden, which could create an uneven playing field for Czech industry.

Source: novinky.cz