British lawmakers approved a 25% windfall tax on oil and gas producers in the British North Sea that the government says will raise 5 billion pounds ($5.95 billion) in 1 year to help people struggling with soaring energy bills.
The Energy Profits Levy will target profits made from a spike in oil and gas prices as energy demand is going up after pandemic lockdowns ended and the Russia/Ukraine conflict started.
The tax bill still has to pass through the upper legislative chamber known as the House of Lords to become law. The Lords can seek to amend a bill but very rarely try to block legislation outright.
The tax was first announced by the Conservative government on 26 May and was met with critiques from oil and gas companies that it would shrink investment and domestic production.
The government says an investment incentive, which means firms could receive a 91 pence tax relief on every pound ($1.19) spent on new oil and gas extraction, would underpin energy security.