The UK government proposes to ease taxation of the oil and gas industry in its 2016 budget disclosed on Mar. 16.
Oil & Gas UK welcomed the measures, saying they lower the “headline rate of tax paid on UK oil and gas production” to 40% on all fields from 50-67.5% at present.
“Today’s announcement does indeed mark further progress in modernizing the tax regime for an increasingly mature basin,” said Deirdre Michie, Oil & Gas UK chief executive.
The budget abolishes the 35% petroleum revenue tax and reduces the supplementary charge on producers to 10% from 20%.
Among other provisions, it provides an additional £20 million of funding for a second round of seismic surveys in 2016-17.
The budget also provides assurance of the availability of decommissioning tax relief when offshore equipment is sold.
