Image source, Getty Images By Noor Nanji Business pressreporter, BBC News The windfall tax on oil and gas companies will be ditched if rates fall to typical levels for a sustained duration, the federalgovernment hasactually revealed. Halting the windfall tax would cut the general tax rate on energy companies from 75% to 40%. A windfall tax is utilized to target companies which advantage from something they were not accountable for. It was presented last year to aid fund a plan to lower energy costs for families and services. Energy company earnings have skyrocketed justrecently, atfirst due to increasing need after Covid constraints were raised, and then because Russia’s intrusion of Ukraine raised energy costs. But oil and gas costs have now come down from their highs. In a declaration, the Treasury stated the windfall tax – called the Energy Profits Levy – will end if average oil and gas rates fall to, or listedbelow, a set level for 2 successive three-month durations. If not, the tax will stay in location till March2028 The level hasactually been set at $71.40 per barrel for oil and £0.54 per therm for gas. Brent crude oil was trading at $75 per barrel on Friday earlymorning, with gas rates at around £0.62. Energy companies haveactually been advising ministers to lower the windfall tax, caution that it was triggering business to pull back financialinvestment. In April, the UK’s biggest oil and gas manufacturer Harbour stated it would shed 350 UK onshore tasks as a outcome of the windfall tax. French oil giant TotalEnergies likewise stated it would cut its prepared 2023 North Sea financialinvestment by a quarter – £100m – since of the
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