Portugal approves temporary tax on oil company windfall profits

On Thursday, the Portuguese government approved a bill to impose a temporary tax on the windfall profits of oil companies generated by rising prices following conflicts in the Middle East. The Cabinet announced that the resulting tax revenue will be allocated to support families and sectors most affected by increased fuel costs, while also funding investments in the decarbonization of the national economy.

The legislative proposal must now be submitted to the Portuguese parliament for further review and approval. This decision follows Portugal's coordination with Austria, Germany, Italy, and Spain, which together called for the taxation of excess profits, drawing parallels to similar measures implemented in 2022 following the Russian invasion of Ukraine. Finance Minister Joaquim Miranda Sarmento previously confirmed in May that the European Commission had given the initiative the "green light," enabling the government to proceed with the temporary fiscal measure.