Leo Varadkar has confirmed that energy companies will pay “hundreds of millions” of euro in windfall taxes from their megaprofits.
The Taoiseach told the Dáil that Energy Minister Eamon Ryan had updated the Cabinet on Tuesday morning that a deal to levy the tax is just “weeks away.”
And he had further good news for households being hammered that the taxes will be backdated so the companies pay taxes on last year’s profits too.
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A senior government source told the Irish Mirror that the monies raised will not be strictly ringfenced for cost of living and energy cashbacks, but that it is “the intention” of ministers to use the extra taxes to help struggling families and small businesses.
The Taoiseach’s comments came during Leaders’ Questions after Social Democrats co-leader, Roisin Shortall, demanded to know what extra support the Government plans to give to cash-strapped households and businesses.
The Soc Dems will have a Private Members Bill (PMB) in the Dáil this evening calling for the windfall tax and energy price caps to be introduced immediately.
Responding in the Dáil, Mr Varadkar said: “A windfall tax on energy companies is weeks away.
“I do not think we are late in the day because companies pay tax now on profits they made last year and last year only ended six or eight weeks ago so we will have that tax in place in the near future.
“It will be retrospective in the sense that the companies will pay it on the profits they made last year and will also pay it again on the profits they make this year so we will have two years of revenue coming in from that windfall tax and will be able to use it to help businesses and households with the high cost of energy and the high cost of living.
“It will be a few months before we start seeing those gas and electricity prices fall but I believe we will start seeing them fall in a few months time - first for businesses and subsequent to that, for households.
“We do not have exact figures yet but we do anticipate that a number of State energy companies will record very high profits with the ESB being one of those. There are two mechanisms we can use to recoup some of those profits.
“One is the special dividend while the other is the windfall tax.
“We intend to use those mechanisms to take that money back and make sure we can use it to help homes, families and businesses with the cost of living.”
Ms Shortall believes price caps are still needed.
She said: “Enough is enough.
“A targeted energy price cap – which caps the price of average energy usage for households and businesses – would provide immediate relief from energy price shocks.
“It would ensure that everyone can avail of affordable rates for their essential energy needs, while those who use a disproportionately large amount of energy pay more.”
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