The shadow chancellor claims energy companies are making “war profits” from Russia’s invasion of Ukraine’s oil and gas prices.
Rachel Reeves stated that corporations should be “properly taxed.”
Last year, the UK government taxed oil and gas revenues to fund bill reduction.
The Labour party has pledged to increase the windfall tax but has not specified by what amount.
The Energy Profits Levy (EPL), which will be implemented in May 2022 at a rate of 35%, brings the total tax rate on oil and gas companies to 75%.
The levy applies only to UK oil and gas extraction profits, not refining or forecourt sales.
Ms. Reeves stated, “There needs to be an appropriate windfall tax on the enormous profits made by energy giants because while they make enormous profits, consumers pay enormous bills.
She added, “These are the spoils of war, and they should be taxed appropriately to assist those in a cost-of-living crisis.”
They are conflicting earnings. The only explanation for such an increase in energy prices is Russia’s illicit invasion of Ukraine. And as a result, the energy companies have enjoyed increased profits, while everyone else has been saddled with higher expenses.
“Those are not profits because of the companies’ great ingenuity… that money should be used to assist families with their energy bills and businesses whose bills have also increased.”
The energy behemoth Shell reported profits of £7.6 billion for the first three months of the year earlier this month. First-quarter profits for BP totaled £4 billion.
Both corporations’ profits are mostly earned abroad and free from the UK’s windfall tax.
A windfall tax is used to target companies that profit from something they did not cause.
After Covid limits were repealed and Russia invaded Ukraine, energy costs rose, boosting energy company profits.
