Ernst & Young: Scots Independence Will Mean Oil, Gas Tax Rise
The levels of taxation levied on the North Sea's oil and gas industry will increase should Scotland become an independent country, according to an Ernst & Young survey of almost 140 industry leaders and decision makers.
The survey, conducted as part of EY's "Grasping the Thistle" report produced in associated with Aberdeen & Grampian Chamber of Commerce, found that 79 percent of respondents anticipate a tax hike from the UK Continental Shelf (UKCS) in the event of "yes" vote for independence.
The result shows that oil and gas companies remain unconvinced by promises on taxation by the pro-independence Scottish Government, EY said.
"The current Scottish Government has consistently stated that taxes would be reduced generally or in some targeted fashion following a 'yes' vote to promote Scotland's economic prosperity. However, the results of our survey appear to suggest that oil and gas executives presently do not believe that this would apply to them," Colin Pearson, a tax partner at EY Aberdeen, said.
"The surprise tax rise introduced in the 2011 Budget may have rocked the industry, but subsequent announcements, including the creation of Decommissioning Relief Deeds, have redressed that, resulting in a relatively stable relationship and mutual understanding between the sector and HM Treasury.
"Clearly, exposing the regime to any further seismic shocks would damage trust between those parties, but the onus is on the Scottish Government to do more to engage with the oil and gas community, starting with the publication of its blueprint for independence next week."
However, nearly two-thirds (64 percent) of respondents to the EY survey said that the referendum debate is having no impact on North Sea investment plans with the supply of skilled employees emerging as their most pressing area of concern for oil and gas executives, followed by cost base.
Colin Pearson added: "It appears that rather than worrying about the implications of the independence vote the oil and gas industry is simply focussing on the task at hand – extracting the North Sea's remaining reserves, running their businesses and generating wealth and employment for the Scottish and UK economies."
Two days ago, the Scottish Government released details of the first-ever estimate of oil and gas exports to the rest of the UK and international markets. Its new Oil and Gas Analytical Bulletin found that Scotland's oil and gas exports amounted to more than $48 billion in 2012.
Scotland goes to the polls to vote on independence on September 18, 2014.
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