Copper and silver prices surge, adding billions to Poland’s budget

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

Revenue from the tax on the extraction of certain minerals is expected to reach PLN 8bn (EUR 1.83bn) in 2026, according to the execution forecast presented in the draft 2027 budget law. That would be by far the highest amount since the tax was introduced in 2012, and PLN 4.8bn (EUR 1.10bn) more than provided for in the 2026 budget law.

An (ultra-)brief history of the tax

The tax on the extraction of certain minerals was introduced in 2012 and initially covered copper and silver. In practice, KGHM Polska Miedź is the main taxpayer. The levy was later extended to crude oil and natural gas. Their extraction became subject to the tax on January 1, 2016, although the payment obligation for these commodities applies only to oil and gas extracted from November 1, 2019 onward.

In practice, however, the overwhelming majority of revenue comes from taxing copper and silver. In 2024, total receipts reached PLN 4.03bn (EUR 922m). Of that, PLN 3.79bn (EUR 867m), or nearly 94%, came from copper and silver. Revenue from crude oil and natural gas amounted to PLN 247m (EUR 56.5m), or just over 6%.

A jump in budget revenue

The scale of the increase in minerals-tax revenue is particularly striking over a longer period. In the first years after the tax was introduced, annual budget receipts ranged from PLN 1.3bn to PLN 1.9bn (EUR 297m-435m). As recently as 2020, they stood at PLN 1.7bn (EUR 389m). A clear shift came in 2021, when revenue rose to PLN 3.7bn (EUR 846m). It remained elevated in subsequent years, at around PLN 4bn (EUR 915m) annually in 2022-2024 and PLN 4.8bn (EUR 1.10bn) in 2025.

The projected PLN 8bn (EUR 1.83bn) in 2026 would represent an increase of around 68% from the previous year. A tax that for many years generated less than PLN 2bn (EUR 458m) annually for the state budget is set to become a much more important source of revenue.

The budget had assumed just PLN 3.2bn

The gap looks even more striking when the latest forecast is compared with the figure written into the budget law. Revenue of PLN 3.2bn (EUR 732m) had been budgeted for 2026. The Ministry of Finance now expects PLN 8bn (EUR 1.83bn), PLN 4.8bn (EUR 1.10bn), or 150%, more than originally planned.

This is not the first time revenue from the tax has been substantially underestimated. In 2021, the budget assumed around PLN 1.5bn (EUR 343m), while actual receipts reached PLN 3.7bn (EUR 846m). In 2022, the corresponding figures were PLN 2.6bn (EUR 595m) and PLN 3.8bn (EUR 869m), and in 2025, PLN 3.5bn (EUR 801m) and PLN 4.8bn (EUR 1.10bn). In 2023, by contrast, receipts came in below target: PLN 3.9bn (EUR 892m), compared with a planned roughly PLN 4.6bn (EUR 1.05bn).

Such large discrepancies are not accidental. The structure of the tax means that receipts depend heavily on copper and silver prices and on exchange rates.

Copper and silver prices surge

The rise in tax revenue has coincided with a very sharp increase in copper and silver prices. Between January and August 2026, a tonne of copper cost an average of around USD 13,300, or PLN 48,800 (EUR 11,200). In 2025, the corresponding figures were USD 9,900 and PLN 37,400 (EUR 8,560). That represents an increase of around 34% in dollar terms and 30% in PLN terms over the year.

The shift in the silver market was even more pronounced. The average price rose from USD 39.8 to USD 74.6 per ounce, an increase of 87%. In PLN terms, it climbed from PLN 149.6 (EUR 34.2) to PLN 271.5 (EUR 62.1), or 81%.

The longer-term increase is also substantial. Compared with 2012, copper is now around 88% more expensive in PLN terms, while silver is around 168% more expensive. Such a sharp rise in metals prices, particularly over the past year, helps explain why revenue from the minerals extraction tax is expected to increase from PLN 4.8bn (EUR 1.10bn) to PLN 8bn (EUR 1.83bn) in 2026, exceeding the amount written into the budget law by PLN 4.8bn (EUR 1.10bn).

Record revenue despite a tax cut

The increase in revenue in 2026 is all the more notable because the tax on copper and silver extraction was cut at the start of the year. The coefficient used to calculate the levy was reduced from 0.85 to 0.74 in 2026. The change was intended to ease the burden on the sector and leave companies with more funds for investment.

Record receipts are therefore being generated despite the lower effective tax burden. The rise in copper and silver prices has been strong enough to more than offset the impact of the regulatory change on the budget. Moreover, the original regulatory impact assessment estimated that the tax cut would reduce budget revenue by around PLN 500m (EUR 114m) in 2026 and by PLN 750m (EUR 172m) in each of 2027 and 2028. Those estimates, however, were based on copper and silver prices as of May 21, 2025 – considerably lower than current levels. This means that, at today’s prices, the actual loss of revenue resulting from the lower coefficient may be greater than originally assumed in the regulatory impact assessment.

For 2027, the Ministry of Finance forecasts revenue of PLN 6.6bn (EUR 1.51bn). The decline from the record level expected in 2026 is projected to come as the coefficient is cut further, from 0.74 to 0.68. Even so, forecast revenue would still be around 39% higher than the PLN 4.8bn (EUR 1.10bn) collected in 2025, making it the second-highest result since the tax was introduced.

The minerals tax is (almost) a windfall tax

The sharp rise in copper and silver prices also means exceptionally high government revenue from the existing tax on the extraction of certain minerals. In that sense, it acts as a fiscal equivalent of a windfall tax. Without introducing a new levy, the state budget captures part of the gains generated by the surge in commodity prices.

This is particularly interesting in the context of the CPN package (Lower Fuel Prices – a government-introduced price cap on petrol priced – ed.). The government had assumed that a significant share of its cost would be offset by a new windfall tax on fuel companies, expected to generate PLN 4bn (EUR 915m) in revenue. The law did not enter into force, however. President Karol Nawrocki referred it to the Constitutional Tribunal, citing primarily concerns over the retroactive application of its provisions.

Meanwhile, this year’s revenue from the minerals tax alone is expected to exceed the budget plan by an even larger amount: PLN 4.8bn (EUR 1.10bn). By comparison, the cost of the CPN package to date stands at PLN 5.2bn (EUR 1.19bn), comprising PLN 3.4bn (EUR 778m) in VAT and PLN 1.8bn (EUR 412m) in excise duty. This does not, of course, mean that the CPN package has been financed by the minerals tax. Government budgets do not work that way.

The scope for fiscal policy is also constrained by Poland’s domestic stabilizing expenditure rule and by EU fiscal rules. Higher-than-expected receipts from one tax do not necessarily translate into an equivalent improvement in the overall budget balance. Revenue from other sources may fall short of projections, while spending may exceed them. From the perspective of the public-finance balance, however, the additional revenue from the minerals tax provides a significant counterweight to the cost of support measures.

In 2026, revenue from the tax on the extraction of certain minerals is expected to reach a record PLN 8bn (EUR 1.83bn), up from PLN 4.8bn (EUR 1.10bn) a year earlier. For 2027, the Ministry of Finance forecasts PLN 6.6bn (EUR 1.51bn) – below the record expected in 2026, but still well above the levels seen in previous years.
The 2026 budget law had assumed revenue of just PLN 3.2bn (EUR 732m) from the tax. The latest forecast is therefore PLN 4.8bn (EUR 1.10bn), or 150%, higher. The main reason is that copper and silver prices have risen much more sharply than expected.
The metals rally is boosting tax revenue even as the levy itself has been reduced. The coefficient used to calculate the tax fell from 0.85 to 0.74 in 2026, meaning that under the previous rules government revenue would have been even higher. The fiscal cost of the reduction may also prove greater than initially estimated, since the regulatory impact assessment was based on significantly lower metals prices from May 2025.