UK plans to extend windfall taxes on energy firms; aims to raise $45.55 billion over five years
Rishi Sunak and Jeremy Hunt plan windfall tax hike
In order to generate nearly 40 billion pounds ($45.55 billion) over the next five years, British Prime Minister Rishi Sunak and Finance Minister Jeremy Hunt intend to extend windfall taxes on oil and gas corporations, according to a report published in The Times on Wednesday.
According to the publication, Sunak and Hunt seek to maximise income from the windfall tax by raising the rate from 25% to 30% and prolonging it until 2028. The plan will also be expanded to include power generators.
In response to Reuters' request for comment, Downing Street and the finance ministry did not immediately react.
The announcement comes as four of the five major oil firms in the world have already released earnings, generating combined net income of about $50 billion, helped by limited global supply and disruption caused by Moscow's invasion of Ukraine.
Last Thursday, Shell announced a $9.45 billion quarterly profit and increased its dividend by 15%.
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The scale of the earnings has rekindled calls from lawmakers and consumer advocacy organisations to levy additional taxes on the firms to collect money to counteract the blow from increasing energy bills to individuals, businesses, and the overall economy.
The 25% windfall tax on the earnings of oil and gas companies was implemented in May by Sunak during the administration of former Prime Minister Boris Johnson. This tax was used to pay for a set of household support programmes.
Oil and gas businesses at the time criticised the move, claiming it would reduce investment and local output.
Sunak's administration need to look into extending the Kyoto Protocol, according to Alok Sharma, the COP26 summit's president, who announced this earlier this week.
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