Slovak gas transit in jeopardy if new pipeline tax is passed, minister warns

Adopting an additional tax provided in the European Commission’s guidelines on windfall taxes would cripple Eustream and significantly jeopardise the gas transit system that runs through Slovakia, Economy Minister Karel Hirman said.

“This is an illogical move from the state’s point of view. It taxes an entity affected by the crisis, which does not benefit from it in any way and does not take any windfall profit,” said Miroslav Bodnár, a member of the company’s board of directors.

National Council member Milan Vetrák (OĽaNO), one of the council members who tabled the proposal explained that pipelines are not taxed with property tax. The bill proposes to tax every kilometre of pipelines by €6,000, which would bring in approximately €171 million a year.

Eustream claims to have lost 87% of its profits in the last five months and, if it were to pay any more taxes to the state in such circumstances, it would record a €38 million loss by the end of the year.

The tax was already passed by the National Council in December but was vetoed by President Zuzana Čaputová, arguing it only affects one company – Eustream.

It has also been criticised by the Economy Ministry, which has repeatedly pointed out that Eustream is not benefiting from the current crisis. On the contrary, the gradual substitution of Russian gas by liquefied alternatives and reduced demand from Ukraine are taking away a significant part of gas transit demand.

Data show that the company transported only 8.3 billion cubic metres of gas in the last five months – an almost 50% drop compared to the same period last year.

“Such an ill-considered decision on additional taxation may not only fatally affect the financial situation of the company but also significantly jeopardise the transportation of gas through Slovakia,” acting Economy Minister Karel Hirman said in December.

The proposal is currently being discussed by the National Council with Eustream trying to lobby National Council members not to support the new tax again. If the bill is passed again, Eustream wants to fight back.

“There are several options, either in Slovakia or in the Union,” Bodnár concluded.

(Michal Hudec | EURACTIV.sk)

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