Poland's government plans to claim extra taxes from state-run utilities from 2017, it announced on Thursday, in a move that analysts say would help it finance social projects but hurt minority shareholders.

The plan involves raising capital by increasing the nominal value of the utilities' shares, and not issuing new shares.

While this is unusual, it is allowed by Polish law and obliges the utilities to pay flat-rate income tax of 19 percent on the increased nominal value.

Analysts said the move would help the government finance the social benefits it promised in its election campaign last year, especially in 2017 when the budget will be much more strained than in 2016.

Poland's allies in the west of the EU and in the United States have criticised the PiS government, saying its approach is eroding democracy and the rule of law.

State-run news agency PAP quoted Energy Minister Krzysztof Tchorzewski as saying the nominal share value of state-run companies will increase by 50 billion zlotys ($13 billion) in coming years.

The ministry has already asked one of its companies - Poland's biggest power producer, PGE - to increase the nominal value of its shares, by 5.6 billion zlotys.

The ministry then reduced this, but later the minister was quoted as saying that this was a ‘pilot project’.

‘The minister talked about these plans before, but no one had expected such a scale. In practice, this is taking taxes for the state and penalising minority shareholders,’ said Krzysztof Kubiszewski, equity analyst at Trigon DM.

The minister told parliament the plan would provide ‘normal income’ for the state.

‘It has been avoided up to date and money was directed to the spare capital so that the funds for dividends or other things were bigger,’ PAP quoted Tchorzewski as telling parliament.

Tchorzewski's announcement immediately sent utilities shares down. At 1305 GMT shares in PGE were down 5.3 percent, Enea's by almost 6 percent, Energa's by 5.13 percent and 2.5 percent in PGNiG.

He said earlier this year that the aim of state-run utilities is to guarantee energy security, not to pay dividends.

A government source told Reuters that raising the nominal value at the state-run firms will take place on a larger scale next year, given the government's spending needs.

Pawel Puchalski, head of equity research at DM BZ WBK, said he expected the ministry to execute the plan at all the state-run utilities ‘more or less’ simultaneously.

Puchalski calculates that Poland's gas firm PGNIG will have to pay up to 2.7 billion zlotys in tax from the transaction, PGE up to 1 billion, and Enea up to 1.6 billion.

‘This means a real cash outflow from the companies and this in turn for sure will not improve their ability to finance investment or pay dividends,’ Puchalski said.