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ITALY: Fin Min Announces Windfall Tax On Company Profits

ITALY
Homepagemarkets-real-timePolitical RiskPolitical Risk BulletCEEMEAEurozoneItalyBulletGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

Speaking at the Bloomberg Future of Finance event in Milan, Finance Minister Giancarlo Giorgetti raised the prospect of windfall taxes on companies intended to boost the gov'ts fiscal outlook. Giorgetti: "We will be approving a budget that will require sacrifices from everyone, which means taxing extra profits. It means taxing profits made and revneues made, and it is and effort that the whole country must undertake which means individuals, but also small, medium and large companies."

  • Reuters reported over the summer claimed that the gov't was not contemplating a windfall tax, but Giorgetti appears to have performed a U-turn on the idea.
  • The announcement of a windfall tax on bank profits in August 2023 sparked a rout in Italian stocks, resulting in the gov't watering down proposals but after the incident had already dented the economic credibility of PM Giorgia Meloni's administration.
  • While Meloni has been able to carry support within her tripartite gov't coalition on most domestic and foreign policy issues, on the economy there remain notable splits. Giorgetti hails from the right-wing populist League of Deputy PM Matteo Salvini, and Meloni's national-conservative Brothers of Italy are also likely to support such a move. However, the pro-business centre-right Forza Italia founded by the late Silvio Berlusconi is seen as less inclined to back a windfall tax. 
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Speaking at the Bloomberg Future of Finance event in Milan, Finance Minister Giancarlo Giorgetti raised the prospect of windfall taxes on companies intended to boost the gov'ts fiscal outlook. Giorgetti: "We will be approving a budget that will require sacrifices from everyone, which means taxing extra profits. It means taxing profits made and revneues made, and it is and effort that the whole country must undertake which means individuals, but also small, medium and large companies."

  • Reuters reported over the summer claimed that the gov't was not contemplating a windfall tax, but Giorgetti appears to have performed a U-turn on the idea.
  • The announcement of a windfall tax on bank profits in August 2023 sparked a rout in Italian stocks, resulting in the gov't watering down proposals but after the incident had already dented the economic credibility of PM Giorgia Meloni's administration.
  • While Meloni has been able to carry support within her tripartite gov't coalition on most domestic and foreign policy issues, on the economy there remain notable splits. Giorgetti hails from the right-wing populist League of Deputy PM Matteo Salvini, and Meloni's national-conservative Brothers of Italy are also likely to support such a move. However, the pro-business centre-right Forza Italia founded by the late Silvio Berlusconi is seen as less inclined to back a windfall tax.