Brendan Burgess
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If the EU doesn't do it, we will
Windfall gains of energy companies to be taxed
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Brendan Burgess
Founder
- Messages
- 58,246
Windfall Energy Tax
Turning to revenue raising measures; much work is underway in the EU on capturing the windfall gains of energy companies. It is not fair for companies to earn excess profits from the current volatility in the market.Ireland aims to be part of this EU-wide response to high energy prices. If this is not possible, this government will bring forward our own measures.
I see windfall taxes on energy companies are back on the agenda again, its amazing that irish government is very squeemish on levying these taxes. Its like they are being dragged by the EU again into bringing them back. I wonder why?
Maybe because the biggest beneficiaries of high energy prices are ESB and BnM , state owned companies.
They are levying the taxes on the wind and solar companies aswell who also benefit hugely from high energy prices as they get full price even though they don't need to buy any expensive oil and gas themselves. The tax on those was only levied very marginally on windfall profits above a certain threshold. It should be levied on revenues not profits as those can be manipulated downwards by artificially increasing costs in those years.
Alot of the narrative regarding cuts in excise duties on petrol and diesel is about the lost revenue, however the government could easily use the windfall taxes to offset the loss in excise taxes for as long as fuel prices remain high.
Maybe because the biggest beneficiaries of high energy prices are ESB and BnM , state owned companies.
They are levying the taxes on the wind and solar companies aswell who also benefit hugely from high energy prices as they get full price even though they don't need to buy any expensive oil and gas themselves. The tax on those was only levied very marginally on windfall profits above a certain threshold. It should be levied on revenues not profits as those can be manipulated downwards by artificially increasing costs in those years.
Alot of the narrative regarding cuts in excise duties on petrol and diesel is about the lost revenue, however the government could easily use the windfall taxes to offset the loss in excise taxes for as long as fuel prices remain high.
Ah yes, let's increase taxes on solar and wind to subsidise fossil fuel pollution.
Joe,
I believe you are right. We saw in August 2022 when wholesale gas prices spiked retail prices rose in unison but never fell fully to match the collapse in whoesale gas prices by December that year. Wind energy companies made off like bandits because their prices were linked to wholesale gas prices yet their costs had not gone up one cent. The price spike at retail level has never fallen to pre August 2022 so, there must have been a supernormal profit level embedded for the last 4 years.
Solar/wind is already subtley subsidised by virtue of their feed-in tariffs being benchmarked to wholesale gas prices