Economic Report 2018

5.5 UKCS Fiscal Competitiveness

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The UK offshore oil and gas industry remains a significant contributor to the UK’s public finances and to the broader economy. Direct contributions from the industry include:

• The production taxes paid by the industry from the licensed extraction of oil and gas • The corporate and business taxes paid by the wider supply chain which supports the industry • The payroll and employment taxes which are contributed by companies across the industry and by those it employs, either directly or indirectly

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In addition to this, the industry also contributes to wider economic benefits, such as:

• Exports, including oil field goods and services, raw crude oil and gas and refined oil products • Strong domestic production results in improvements to the overall balance of trade – reducing energy imports • Security of energy supply • Induced employment and economic activity within the wider economy from the industry’s presence across the UK • The development of technology, innovations and skills which cascade out of the industry

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Figure 37: The Wider Economic Benefits of the UKCS Oil & Gas Industry

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Wider Economic Benefits

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UKCS production corporation and business taxes

Supply chain corporation and business taxes

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Industry payroll and employment taxes

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Balance of trade, security of energy supply, exports, skills capability, technology and innovation, induced employment

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