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OBR cuts North Sea tax receipts forecast

The Office for Budget Responsibility (OBR), the UK’s budget watchdog, has cut its long-term forecast for North Sea oil and gas tax receipts by 94%. In its latest Fiscal sustainability report it has estimated that a total of £2.1bn would be raised in the 20 years to 2040-2041 – about £34.5bn lower than it estimated last year, and less than the tax revenue from last year alone. The OBR said its new forecast ‘shows that the effect of lower oil and gas prices and production has been partly offset by lower expenditure to leave the implied pre-tax profits from the North Sea positive, but relatively low.... The effects of accumulated losses reducing the effective tax rate paid by companies in the North Sea, plus the repayments associated with decommissioning costs, mean that in our central projection just £2bn of receipts will be raised in total between 2020–2021 and 2040–2041.’ However, it also noted that these projections are ‘subject to considerable uncertainty’.

News Item details


Journal title: Petroleum Review

Countries: UK -

Organisation: Office for Budget Responsibility (OBR)

Subjects: Oil and gas, Taxation, Petroleum taxation, Energy policy

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