With energy prices skyrocketing and households being put under increasing financial pressure, MEPs will discuss the merits and the most effective way of imposing a windfall tax on energy companies’ profits. In a resolution adopted in May, MEPs called for such a tax in principle.

Taxing windfall profits of energy companies: extracts from the debate

https://api.multimedia.europarl.europa.eu/documents/20125/46289282/1657126488538_I228168Chapters%5BSD-EN%5D.srt

SOUNDBITE (English), Mikul&#225;&#353; BEK, Czech State Secretary for European Affairs, The idea of taxing windfall profits of an energy companies has emerged in the context of the current energy crisis, and it has been floated as a possible measure to compensate high energy prices. The Czech presidency is of the view that taxing windfall profits of energy companies is indeed amongst the tax measures that could be considered in a context where both households and companies are suffering greatly from the steep rise of energy prices.

SOUNDBITE (English), Mikul&aacute;&scaron; BEK, Czech State Secretary for European Affairs, Some European countries, such as Portugal and Spain have already started to tax windfall profits of energy companies. Their experience is surely interesting to observe in order to see whether this measure fulfils its objective, has a real effect and proves useful. If so, I'm sure other member states could wish to take up as well.

SOUNDBITE (English), V&#283;ra JOUROV&#193;, Vice-President of the EC in charge of Values and Transparency, Taxes on these windfall profits is efficient because it raises revenues without affecting business decisions. Resources would still be allocated in order to maximise their economic potential and not to avoid taxation revenues raised in such an efficient manner. can and should therefore be used to support vulnerable consumers as member states can distribute such revenues amongst final consumers offsetting high energy prices.

SOUNDBITE (English), Věra JOUROV&Aacute;, Vice-President of the EC in charge of Values and Transparency, The taxation of windfall profits leaves markets economic efficiency intact. Therefore, already in the Repower EU communication from March this year, the commission stated that member states may exceptionally consider implementing such a tax. But such a measure needs to be carefully designed to avoid undesirable market distortions and avoid discouraging investments in renewable energy.

SOUNDBITE (German), Markus FERBER (EPP, DE), The truth is that we have to work on the supply side to improve the situation. To do that, we need investment. And if it's precisely those companies that should be investing, find their profits being taken away from them, then they can't do it. Well, then it's up to the public sector to do the investment. So I don't know if all of this fits together.

SOUNDBITE (French), Aurore LALUCQ (S&amp;D, FR), Now more than 100 percent energy company profits have shot through the roof and it would be OK if these profits came from revolutionary innovation. But it is not the fruit of a market economy. But because it is on the back of the environment and citizens who are finding it hard to make ends meet, these are windfall profits. They are unacceptable, unacceptable

SOUNDBITE (German), Rasmus ANDRESEN (Greens/EFA, DE), The Greens propose that with just 50 percent tax on windfall profits. Some of these revenue should be invested in renewables. We urgently need renewables. We urge finance ministers to take the step to get together.

SOUNDBITE (French), Marc BOTENGA (The Left, BE), People's coffers are being raided. And where is the money ending up in the hands of multinationals who are raking it in, making excess profits well above the usual level of profit they notch up. So we need this type of tax on energy companies.

SOUNDBITE (German), Engin EROGLU (Renew, DE), Increased taxes are supposed to be leading to reduced costs for consumers. But I don't think that these people have been listening to economics classes. What we need now is a serious debate on interest rate rises and tax cuts. People need more net out of their gross so they can afford more.

Event date	06/07/2022
Reference:	I228168V
Format:	16:9 format
Copyright:	© European Union
copyrightYear:	2022

Taxing windfall profits of energy companies: extracts from the debate

Description

Details

Tags