Windfall Profits Tax

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Windfall Profits Tax

A tax on profits seen as excessive. For example, a windfall profits tax may be imposed on oil companies when their profits rise above a certain amount. The idea behind a windfall profits tax is to encourage the taxed persons or companies to lower their prices, which is thought to be good for consumers. However, it may have the effect of reducing investment because the aftertax profit may not be worth the effort. See also: Windfall shares, Windfall tax.
References in periodicals archive ?
Finance Minister Alexander Chikwanda has in the past called advocates of the windfall tax as lunatics.
I cannot see how a windfall tax will help the average family over the coming winter.
* Windfall tax calculation = 23% x [(365 x (P / D) x 9) - FV], where the windfall tax rate is 23%, P equals the amount of the total profits for the company's initial period, D equals the number of days in the company's initial period, and FV equals the notation value (i.e., selling price)
Should the winning bidder sell the unit at, say, NT$300 million within one year, he or she will have to pay a windfall tax amounting to NT$90 million at 30% tax rate.
The Treasury is believed to be drawing up plans for a one-year windfall tax on bonuses paid to some UK-based bankers, and the plan is expected to be announced this week.
On the prospect of a windfall tax, he said he did not want to damage the financial services industry, which employed more than one million people across the UK.
QUITO: Spain s Repsol-YPF oil company has paid Ecuador 88.9 million dollars in back windfall taxes, a fraction of the 444 million Quito has requested, Oil Minister Derlis Palacios said Friday.
Over and above the 25% windfall tax, introduced in April 2008, the finance ministry also slapped on a 15% variable profit tax on income above 8% of sales, raised mineral royalties from 0.6% to 3% and corporate tax from 25% to 30%.
OIL giants Royal Dutch Shell have revealed record annual profits of pounds 22 billion - sparking new calls for a windfall tax on energy firms.
Despite the fourth quarter pressure, unions said there remained a compelling case for a windfall tax on energy companies.
The Prime Minister is to unveil proposals to help around ten million households with loft insulation, a new boiler and double glazing, but not to impose a windfall tax on fuel companies, according to reports last night.
THE Government is finally expected to unveil a fuel poverty package tomorrow but without a windfall tax on energy companies' profits.