Source · Select Committees · Environmental Audit Committee
Recommendation 43
43
Acknowledged
Paragraph: 246
The original 65% tax rate under the Energy Profits Levy was lower than the international...
Conclusion
The original 65% tax rate under the Energy Profits Levy was lower than the international average tax rate of oil and gas producers (of 71%), so we welcome the Chancellor of the Exchequer’s proposal to increase this rate to 75%, while noting that it remains below Norway’s tax rate of 78%.
Government Response Summary
The government acknowledges the committee's welcome of the increase to the Energy Profits Levy and states the changes will bring the overall tax rate for oil and gas companies to 75%, in line with the international average.
Paragraph Reference:
246
Government Response
Acknowledged
HM Government
Acknowledged
The Government introduced the Energy Profits Levy (EPL) in May 2022, to address the exceptional profits being made by oil and gas companies as a result of high global energy prices. In the Autumn Statement 2022, the Chancellor announced an increase to the rate of the EPL from 25% to 35%, and extended its duration until March 2028. These changes will bring the overall tax rate for oil and gas companies to 75%, in line with the international average. The Government recognises that the EPL has an impact on the oil and gas industry, but we believe that it is necessary to ensure that these companies pay their fair share of tax on their profits. The EPL will help to fund vital public services, such as schools and hospitals, and will also help to support households with their energy bills.