Windfall Tax

A windfall tax is a one-off tax levied by governments against certain industries when economic conditions allow those industries to experience above-average supernormal profits. BP for example made a profit of $6.2bn (£4.9bn) in the first three months 2022, compared with $2.6bn in the same period in 2021. Italy has brought one in - the tax on energy industry profits in Italy will rise to 25% this year from 10%. The idea is that extra revenues can be ear-marked to support low-income families during the cost-of-living crisis. Opponents of this government intervention claim that a windfall tax cuts the funds available for capital investment.

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