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Own Our Oil's Budget 2015 submission calls for: Budget 2015 - Super Capital Gains And Windfall Taxes

Own Our Oil

[Shell to Sea]  The map linked to in Point 2 is actually created by Shell to Sea and not by the Irish Examiner as suggested on the Own Our Oil site.

1. Super Capital Gains Tax of 66% on the sale of Irish oil and gas licences (and licence options or the sale of the companies holding those assets)


2. A Windfall Tax on revenues from the many existing licences which are not subject to the new terms and conditions introduced after the June 2014 independent review.

Newly-appointed Minister White at the DCENR called for discussion on Budget 2015, so we expect that he and his colleagues in Government will be receptive to our call.

While our Government currently wrestles with what should be in the forthcoming budget, advisors are calling on them to "proceed with another tough budget next month". That means 'tough on citizens'. Even at best case, the Government can't claim to be introducing a 'neutral' budget, when they are persisting with stealth taxes on the Irish people. budget

The June 2014 announcement of new Irish oil and gas licence terms is proof that the previously existing terms are wrong for Ireland, but the new conditions are not retroactive, meaning that the fields currently being exploited are still ripe for profiteering. While it would be a long legal mess to change terms of the existing licences and options, there is no law prohibiting the introduction of new taxes to redress the balance. In fact, it is expressly outlined in Section 45 of the existing licences that:

"The Minister shall have the right, from time to time, to increase all money amounts mentioned herein having regard to relevant economic factors and shall notify the authorisation holder accordingly. The increases shall have effect from the date of such notice."

Economic factors have indeed changed since these licences were drafted, so in addition to the SCGT of 66%, which we proposed for Budget 2014, Own Our Oil is also calling on the Minister for Finance to introduce a Windfall Tax on extraordinary profits from production.

As the E&Y Tax Guide points out, many countries have a "Tax on Extraordinary Profits" in the hydrocarbon sector. Standard Chartered Bank confirmed to Own Our Oil that the existing Irish licence conditions are ripe for vast profits for the licence holders (see ps 18/19 of our free eBook)

Oil and gas companies are used to such developments from other governments around the world (see Kenya's developing oil industry, for example), so this will be par for the course for them. A lot of time and money has been invested to be ready to extract our natural resources, and this is on schedule to happen in 2015, so a change to conditions is not going to cause the corporations to walk away and leave the assets behind.

We, the people of Ireland, have shouldered far more than our fair share of the austerity measures imposed in recent years - it is time that the Irish government addressed the global perception of Ireland as an international corporate tax haven and start to balance the burden by preventing the wholesale plundering of our natural resources with no benefit to Ireland.

Posted Date: 
25 September 2014