Excise on electricity as an EU own
resource in the light of sustainable
development
Maciej Cieślukowski
Poznań University of Economics and
Business
Department of Public Finance
Why the excise on electricity?
1. Common market of electric energy (Emission
Trading System, Directive 2003, Directive
2011)
2. Excise on electricity in Poland since March
2002 (0,02 PLN/KWh)
3. No previous investigations on the excise on
electricity as EU own resource
Objective, hyphothesis, methodics
Objective
To investigate if the excise on electricity meets criteria of fair
taxation between citizens
Hyphothesis
The excise on electricity does not ensure fair taxation between
consumers
Methodics
- If and how the excise is shifted (multi-variable regression),
- Who suffers higher tax burden: the poorer or richer? (tax
burden decomposition – Pearson concentration coefficient)
Subject of analysis
Polish households in the years 1993 – 2014; 2006 and 2014
Market of electricity in Poland
Date
01.07.1993
01.01.1997
01.01.1999
07.12.1999
01.07.2001
26.03.2002
01.05.2004
01.07.2007
01.03.2009
01.01.2010
Institutional changes
Introduction of VAT (7% on the electric energy) and the excise tax (electric energy is free of the
duty)
Energy Regulatory Office (ERO) is established. President of ERO i.a. regulates and promotes
the market, counters the monopoly practices, approves the tariffs of energy companies
Replacement of the official prices of electric energy set by Ministry of Finance by the separate
tariffs for electric energy and its distribution, calculated (according to official rules) by the
energy companies (producers and distributors). President of ERO controls and approves the
tariffs every year
Polish Power Exchange (PPE) is opened
President of ERO liberates prices for energy producers - he stops approving the tariffs
Introduction of the excise duty on electric energy (0,02 PLN/KWh). The tax is paid by energy
producers
Poland enters the European Union and is obliged to meet the rules of the electric energy market
Directive (2003/54/WE). VAT rate on electric energy increases up to a standard rate 22%
Division of distribution into distribution and trade. Liberalization of the energy trade market.
The final consumers (including households) are free in a choice of the electric energy direct
supplier (a trade company) on a domestic market
The subject to excise taxation is shifted from energy producers to traders. The traders can
formally shift the excise duty on the final consumers and the tax is showed on the invoice
The VAT standard rate increases up to 23%
Structure of the market in Poland
•
•
•
•
•
25 main producers of electricity,
1 transmission operator,
5 main distributors,
5 main trade companies
59 other small trade companies
Formal excise
payer since
March 2002
Formal excise
payers since
March 2009
Regression model
Symbol
et
Vt
Plt
Et
Idt
Ht
St
Ct
Wt
It
Wpt
Ect
Independent variable
the inflation-adjusted excise duty on electric energy in PLN per 1KWh
The VAT rate in percentage points on electric energy
Population in thousands of people
Total electric energy consumed by the households in GWh
Average monthly inflation-adjusted disposed income per household in PLN
Heating degree-days
Total number of suppliers of electric energy for households (trade companies)
Total number of electric energy household consumers that used the right of a free choice of
electric energy supplier
Average monthly inflation-adjusted gross wages in the section of electricity, gas, steam and air
conditioning supply (PLN)
Inflation-adjusted yearly investment outlays in the section of electricity, gas, steam and air
conditioning supply (mln PLN)
Inflation-adjusted yearly wholesale average prices of electric energy sold by producers (PLN
per MWh) – data only for the years 1999 - 2014
Installed electricity capacity (MW)
Alm J., Sennoga E., Skidmore M., 2009, Perfect Competition, Urbanization, and
Tax Incidence in the Retail Gasoline Market, “Economic Inquiry” 47, no 1, p. 118
– 134.
Main results
Independent
variable and other
indicators
et
Wt
St
Ct
R
R2
Test F
p
Free term
ɛt
Durbin-Watson statistic
(0)
1,708371/50 = 0,03416742
0,000107
-0,001500
-0,000000
,99753818
,99508242
859,9961
0,000000
,083735723
,014443535
2,665445
(-1)
1,513876/50 = 0,030277514
0,000109
-0,001754
-0,000000
,99722023
,99444820
761,2669
,000000
,090345464
,015346694
2,088556
Calculation of the average monthly excise duty amount paid
by particular types of the households per capita in 2014
Type of the household
Stages of calculation
Employees Farmers
Monthly expenditures on electric energy/capita
(PLN)
Average gross retail price of KWh of electric
energy (PLN)
Number of KWh used monthly/capita
Rate of the excise duty (PLN)
Amount of the excise duty paid/capita (PLN)
The selfemployed
Retirees Pensioners
41,10
36,31
52,93
56,16
51,26
0,64
0,64
0,64
0,64
0,64
64,22
56,73
82,70
87,75
80,09
0,02
1,28
0,02
1,13
0,02
1,65
0,02
1,76
0,02
1,60
Avaliable income/capita (PLN)
1 349,12 1 050,85
1 631,64 1 458,12
1 072,44
Share of the excise duty amount in available
income/capita
0,00095 0,00108
0,00101 0,00120
0,00149
Calculation of the average monthly excise duty amount paid
by particular types of the households per capita in 2006
Type of the household
Stages of calculation
Employees Farmers
The selfRetirees Pensioners
employed
57,37
59,07
50,25
Monthly expenditures on electric energy/capita
(PLN)
Average gross retail price of KWh of electric
energy (PLN)
39,51
32,47
0,44
0,44
0,44
0,44
0,44
Number of KWh used monthly/capita
89,80
73,80
130,39
134,25
114,20
Rate of the excise duty (PLN)
0,02
0,02
0,02
0,02
0,02
Amount of the excise duty paid/capita (PLN)
1,80
1,48
2,61
2,69
2,28
829,18
689,75
1 102,63
943,89
684,95
0,00237 0,00284
0,00333
Available income/capita (PLN)
Share of the excise duty amount in available
income/capita
0,00217 0,00214
Person concentration coefficient (K)
for the years 2006 and 2014
2006
Before
taxation
Coefficient K 0,06148975
After
taxation
0,06145382
2014
Before
taxation
0,0481589
After
taxation
0,04814556
Conclusions
1. In the years 1993 – 2014 the excise duty is even
over-shifted on the households.
2. The households in Poland in the years 2006 and
2014 with the relatively lower available income
(particularly pensioners and farmers) are clearly
taxed with relatively higher burden.
3. The excise duty decreases the concentration of
available income between analyzed types of the
households very slightly.
4. We need futher investigations in other Member
States.
Excise on electricity as an EU own
resource in the light of sustainable
development
Maciej Cieślukowski
Poznań University of Economics and
Business
Department of Public Finance