Oil Sector Calls for North Sea Tax Burden to be Halved
THE oil and gas industry is calling on the UK Government to slash the North Sea tax burden by half in the Budget in March.
Industry body Oil and Gas UK wants the Treasury to scrap supplementary tax charges imposed on oil companies in addition to corporation tax.
Oil and Gas UK’s economic director Mike Tholen called for the “very bold move” as BP and Shell prepared to announced plunging profits.
On Tuesday, BP is expected to announce its profits fell to £515million in the fourth quarter of last year, down two thirds on the same period the previous year.
Analysts have also predicted a 57 per cent fall in Shell’s profits, for the three months to December, compared with the previous year.
The falling oil price, down from $115 18 months ago to $36 at the end of last week, has been blamed for the collapsing profits.
The UK oil sector, centred on Aberdeen, has lost 65,000 jobs since the price crash.
The Scottish and UK government held emergency cabinet meetings last week to discuss support for the industry.
The north east of Scotland was handed a £504million funding package over the next 10 years to improve infrastructure and safeguard jobs.
The two governments invested jointly in a £250million “City Deal” for Aberdeen.
In addition, the Scottish government pledged £254million for key infrastructure projects in the region.
Mr Tholen welcomed the City Deal as a “step in the right direction” but said the Budget should offer more help by scrapping special taxes.
“Government has shared in the benefits of the basin over the years and there is nothing wrong with that.
“But what’s needed now is a very bold move,” he told the Sunday Telegraph.
The sector pays a corporation tax rate of 30 per cent, compared with 20 per cent for other companies.
North Sea firms also pay a 20 per cent supplementary tax and older fields pay an additional petroleum revenue tax of 17 per cent.
Source: www.heraldscotland.com
