UK expands windfall tax to 35% for oil and gas companies

Dr Nakhle explains that it is hard to argue against a windfall tax on energy companies when they are reporting record profits and, especially, when consumers are facing dire energy bills.

However, there is no universally accepted definition of what qualifies as excess profit; the EU recently defined it as profit in excess of 20% over last 4 years average.

Also, any new tax to be imposed should take into consideration the system already in place. To start with, a well designed fiscal regime should automatically adapt to various circumstances and should save governments the administrative burden of chasing the volatile energy prices.