Belgium mulls to tax energy companies beyond EU emergency plan

Country estimates to collect $4.6B over 2 years to support households, businesses in energy crisis.

Belgium mulls to tax energy companies beyond EU emergency plan

Belgium mulls imposing more taxes on energy companies than the EU’s emergency plan, resulting in over €4.7 billion ($4.6 billion) in extra revenues for the state to handle the economic crisis, local media reported on Monday.

The Belgian federal government revealed a proposal that aims to tax excess profits of companies producing energy at an inframarginal cost which goes far beyond the plan EU countries agreed on Friday.

The new EU rules allow for extending the time and profit limit, Deputy Prime Minister Petra De Sutter told at the morning program of the Radio1 broadcaster.

She also explained that the government estimates to collect €4.7 billion over two years to support vulnerable households and businesses.

While the EU energy ministers reached a political agreement on a text that allows to cap revenues at €180/megawatt-hour for electricity generators that benefit from significantly lower production costs than the market price received because of the current crisis, such as nuclear or renewable energy companies, Belgium plans to impose the tax as of 130 euros/MWh.

In addition to that, the proposal of the Federal Energy Ministry would extend the taxation period to two years instead of the seven-month-long EU plan, setting a retroactive levy on company profits from January 2022 until the end of 2023.

The government calculates to raise €1.2 billion this year, and a further €2.3 billion next year, in addition to the annual €600 million that fossil fuel companies are estimated to pay as a crisis solidarity contribution.

The plan has yet to be adopted by the Belgian Federal Parliament.