UK lawmakers have approved a windfall 25% tax on the oil and gas industry, hoping to raise an additional £5bn ($6bn) in one year to ease the cost of living crisis for households nationwide, Reuters reported earlier this week.
The energy profits tax imposed on UK North Sea oil and gas producers targets extra profits from soaring commodity prices amid rising demand. Over the past year, the cost of gas has risen by more than 70% and crude oil prices by more than 30%.
The tax was originally announced by the government in May and has now been approved by the lower house of UK Parliament, with some changes. To become law, the bill still has to pass through the upper house, but the step is seen as largely symbolic.
The bill lists 2025 as the end date and allows energy companies to offset certain operating costs through the tax.
Oil and gas companies working in Britain’s North Sea have warned that the windfall tax will reduce investment and slow production growth in the region.
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