UK Chancellor, George Osborne has outlined a series of tax breaks aimed at encouraging investment in the UK’s burgeoning shale gas industry.
At the core of the proposed tax cuts is a reduction in the tax on income generated from the production of shale gas. The current figure stands at 62%, but the cuts would see this figure drop by more than half down to 30%.
Osborne was quoted as saying that shale gas in the UK had “huge potential”, and that he wanted “Britain to be a leader of the shale gas revolution because it has the potential to create thousands of jobs and keep energy bills low for millions of people.”
The 30% tax rate would only apply to the early production life of the well; the reduced rate is designed to act as an incentive for companies to make the initial expenditure involved in drilling a well.
Understandably, the news has met with approval from the shale gas companies operating in the UK. Francis Egan, Chief Executive of Cuadrilla was quoted by the BBC as saying, “Whilst we are still in the exploration phase, we believe that shale gas has the potential to make a considerable contribution to the UK’s energy supply and security, while at the same time creating thousands of jobs and generating very significant tax revenues and community benefits.”
Edited from various sources by David Bizley
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