Germany could earn ‘billions’ from energy profit tax, says Scholz


The German government is set to get a big boost to its revenue from a planned levy on windfall profits generated by energy companies, German Chancellor Olaf Scholz said on Sunday.

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(Bloomberg) – The German government stands to benefit from a major revenue boost from a planned levy on windfall profits generated by energy companies, German Chancellor Olaf Scholz said on Sunday.

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The government will squeeze “very many billions” of euros out of the measure if companies continue to benefit from the turmoil in Europe’s electricity markets, Scholz said in an interview with state broadcaster ZDF on Sunday. Revenues will be used to help consumers affected by runaway inflation.

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The government “will take windfall profits — profits that exceed a threshold in businesses that don’t have such high production costs — and then return them to citizens,” Scholz said.

Earlier on Sunday, the German government presented a 65 billion euro ($65 billion) package to help citizens and businesses cope with soaring energy prices. He vowed to back a European Union effort to introduce windfall taxes as rising profits for some energy companies due to rising electricity prices sparked widespread public outrage .

Read more: EU plans energy price cap and one-off gas risk tax in Russia

Germany has been facing an energy crisis since Russia decided to shut down gas deliveries through the Nord Stream 1 gas pipeline in retaliation for Western sanctions imposed over President Vladimir Putin’s invasion of Ukraine. Russian supplier Gazprom PJSC said on Friday it would not restart the pipeline as planned after three days of maintenance.

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