Last Tuesday, the parliamentary parties of the Dutch House of Representatives submitted their questions on the bill that seeks to impose a temporary solidarity contribution on certain oil and gas companies. Questions from the parliamentary parties focused on how the contribution relates to the increase in severance tax and the effectiveness and viability of the law.
Willing to contribute
The bill aims to skim excess profits from oil and gas companies and to use the proceeds to compensate Dutch households.
From the outset, the industry has been clear about its willingness to make a substantial contribution, but we have also been critical of how this contribution is cast. Element NL has submitted an alternative proposal that will have the same yield – or even higher – by introducing a sliding scale and allowing the severance tax increase to come into effect earlier.
Concerns about the bill
The industry has several major concerns about the impact of the law, compelling the Managing Director of Neptune Energy (Lex de Groot) and the CEO of ONE-Dyas (Chris de Ruyter van Steveninck) to speak out this week in Het Financieel Dagblad. This kind of "double taxation" may harm the investment appetite of some of the gas-producing companies in the Netherlands, not to mention other disadvantages.
"Ceasing North Sea gas production is not only bad for the treasury, but also for the climate." They emphasise that investments in North Sea gas are crucial for the security of supply and that the gas meets the strictest environmental regulations, meaning its carbon footprint is 30% smaller than that of imported foreign gas.
The article also discusses the differences with surrounding countries such as the United Kingdom and Norway. They also have a tax on excess profits but offer a more favourable form of investment relief.
Timeline
Answers to these questions are expected on 18 November, followed by legislative deliberations on Monday, 21 November at 18:00 hours. The vote on the bill is expected to be held in late November.
Element NL is keeping a close eye on developments and hopes that the industry can make a substantial contribution, but without the measure having a detrimental impact on the security of supply in the longer term.
For more on the bill and the corresponding questions, please see here.
Update of 17 November: State Secretary for Finance, Marnix van Rij's response can be found here.
Update of 20 November: the responses of the political parties VVD and CDA to the piece in the FD can be found here.
Update of 21 November: the debate can be viewed here or the report of the legislative deliberations can be read here.
picture: Tweede Kamer