The UK imposes a 25% tax on the profits of oil and gas companies

London The United Kingdom on Thursday announced an unexpected 25% tax on oil and gas producers, along with a relief package for families affected by rising energy bills.

The announcement marks a change of heart for Prime Minister Boris Johnson’s government, which has so far resisted windfall profits taxes as an investment deterrent.

Economy Minister Rishi Sunak, facing intense political pressure to provide more help to taxpayers facing a cost-of-living crisis, according to politicians and opposition activists, said energy companies were making extraordinary profits while Britons were struggling.

“We will introduce a temporary tax on energy profits, which will be applied to the profits of oil and gas companies at a rate of 25%,” Sunak said.

“We are also introducing a new investment allowance that doubles the provision for energy companies investing their dividends in the UK.”

Earlier this week, the Energy Regulatory Agency said the cap on gas and electricity bills would rise by another 40% in October.

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