All articles tagged with #windfall tax
Shell is facing criticism over what its opponents call outrageous profits boosted by soaring oil prices, triggering calls for windfall taxes and greater scrutiny of energy giants, even as the company points to its investments and governance amid an evolving energy transition.
BP reported a $3.2 billion Q1 profit, more than doubling from a year earlier, aided by “exceptional oil trading” as prices surged amid the Iran conflict. The results sparked criticism from campaign groups and renewed calls for windfall taxes on fossil fuels, even as BP said it would work with authorities to keep oil and gas flowing and help address fuel affordability as energy bills rise.
Richard Walker urged a temporary profit cap on energy producers and retailers during crises to prevent windfall gains as households face higher bills amid Middle East tensions; the proposal would be targeted, not permanent, and could go beyond current windfall taxes, with Downing Street and the CMA weighing stronger powers, while critics warn such controls could dampen investment and threaten long‑term energy security.
Shell reported a drop in annual profits to $28.2bn in 2023 from $39.9bn in 2022, attributed to lower energy prices following the surge caused by Russia's invasion of Ukraine. The company paid £178m in UK windfall tax for 2022 and confirmed a total tax payment of £1.1bn in the UK for 2023. Despite the decline in profits, Shell plans to increase its dividend by 4% and initiate a $3.5bn share buyback program. The company's strong results were driven by its gas division, with expectations of continued unpredictability in oil and gas prices due to geopolitical tensions. Shell's chief executive emphasized a focus on delivering more value with fewer emissions in 2024.
Italian Prime Minister Giorgia Meloni defended the decision to impose a windfall tax on profits at Italy's banks, which was later watered down following a market rout. The tax, targeting gains from banks' higher interest rates, will not exceed 0.1% of their total assets. While other European countries have introduced similar taxes, Italy's initial announcement caught the market off guard, damaging confidence. Meloni emphasized the importance of banks behaving correctly given the challenging economic circumstances. Analysts estimate the tax will have an aggregate impact of €1.9 billion ($2.1 billion). Italian bank shares rebounded following the announcement.
Italian bank stocks rebounded after the government diluted a surprise windfall tax on excess profits, which had initially caused shares to plummet. The finance ministry announced a cap on the levy, significantly reducing its negative impact on banks' earnings. Analysts estimated that the tax could have dealt a 19% blow to Italian lenders' net profits for the year. The market reacted positively to the news, with shares of BPER Banca, Banco BPM, Intesa Sanpaolo, Finecobank, and UniCredit all recovering. Concerns about shareholder remuneration also eased, as most banks confirmed their distribution policies.
Italy has surprised its banks by implementing a one-off 40 percent tax on profits generated from higher interest rates, criticizing lenders for not rewarding deposits. The move follows record profits for banks due to soaring loan costs. Other countries, such as Spain and Hungary, have already imposed windfall taxes on the sector. European bank shares plummeted in response to the news, with Italian banks experiencing the largest losses. The tax is expected to impact Italian banks' earnings in 2023, potentially wiping out up to 12 percent.
Italian banking shares experienced a significant decline after the government approved a 40% windfall tax on lenders' "excess" profits in 2023. This tax, which will be used to cut taxes and support mortgage holders, will impact banks' capital, profit, and cost of equity. The tax applies to "excess" net interest income resulting from higher interest rates and will be paid within six months after the end of the financial year. The introduction of this tax may lead to Italian banks increasing their cost of deposits to reduce extra profit.
ExxonMobil has reported record profits of $11.4bn in Q1 2019, more than double the same period last year, due to increased demand for oil and gas and cost-cutting measures. Despite falling oil prices and a $200m hit from windfall taxes in Europe, the company's profits rose. Rival Chevron also reported an increase in profits. ExxonMobil's profits included a $3.4bn after-tax reduction to exit Russia. Shareholders will receive $8.1bn including dividends and $375m in share buybacks.