09 Aug 2022

Government considering windfall tax on energy companies with 'immoral' profits

Government considering windfall tax on energy companies with 'immoral'  profits

The government will consider introducing a windfall tax on energy companies who have enjoyed record profits in the upcoming Budget.

It comes after there were renewed calls for an introduction of the tax on the companies’ soaring profits and for the funding to be used to help households struggling with the rising cost of living crisis and spiraling energy costs.

A windfall tax is a one-off government tax on an unexpectedly large profit from a company.

Speaking to reporters on Thursday afternoon, the Taoiseach said: “The Government will consider a range of issues and will give examination to the issue of windfall tax.

“In the context of State companies like the ESB, we already take a dividend from the ESB so that’s always open to the government to do that,” he said.

“On the other hand, we do want significant investment in renewables into the future, but that said, I think there are significant profits being made all around. We will examine that in the context of the Budget.”

There will be a separate cost-of-living package parallel to extra budget supports in September, the Taoiseach confirmed,  “to alleviate the pressures that are undoubtedly there on many households across the country”.

“We have a lot of challenges ahead, but I think the revenue figures do give us some opportunity and will give us an opportunity in the Budget and the cost-of-living package in September, to take pressure off people,” he said.

Energy companies have risen prices for customers since the energy crisis caused by Russia’s invasion of Ukraine, but have also seen an increase in profits.

UN Secretary-General António Guterres called the profits “immoral” earlier this week. 

“The combined profits of the largest energy companies in the first quarter of this year are close to $100 billion. I urge governments to tax these excessive profits, and use the funds to support the most vulnerable people through these difficult times,” he said.

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