Chancellor To Raise Windfall Tax If Energy Firms Do Not Cut Bills

Chancellor Karl Nehammer has stated that if energy firms do not decrease their retail prices then the gov't 'will make them pay'. Nehammer is demanding that lower energy prices are passed on to customers or utility providers will face an increase in the windfall tax on their profits.

• According to Orbitax, the windfall tax on O&G firms in Austria stands at "40% on excess profits from 1 July 2022 to 31 December 2023. Excess profit is the amount of profit exceeding 120% of average taxable profits in the past four years, 2018 to 2021...For electricity producers, the energy crisis contribution is in the form of a 90% tax on the revenue per megawatt hour that exceeds a EUR 140 cap with effect from 1 December 2022 to 31 December 2023."
• A hard line on energy firms could be seen as an effort both to court public support as well as placate Nehammer's junior coalition partners, the environmentalist Greens. Nehammer's centre-right People's Party (OVP) has leaned to the right on a number of policy issues recently, notably on touting cooperation with the Italian gov't on irregular migration.
• The OVP has lost significant support over the past two years at the expense of the right-wing nationalist Freedom Party, but a major shift rightward in policy is also seen to be alienating the junior coalition partner. A ramp-up in pressure on energy firms could work to dampen the Greens' reservations about immigration policy.