Italy will impose a 10% profit tax on some energy companies to fund a package of measures worth 4.4 billion euros ($ 4.9 billion) to protect consumers and businesses from rising prices.
The contribution will be calculated based on the increase in profits reported by energy companies between October 2021 and March 2022, compared to the same period last year. Companies reporting an increase of € 5 million or more will face a 10% levy, according to a draft decree seen by Bloomberg News.
The tax revenue will allow the government to fund new measures announced Friday without further widening the country’s budget deficit.
“Most of the new measures will not be funded by the state budget, but by energy companies,” Prime Minister Mario Draghi said at a news conference on Friday to present the plan.
Italy imports about 40% of its total gas consumption from Russia and, like many other European countries, struggles with rising energy costs following Russia’s invasion of Ukraine, which has led to a new rise in gas prices. Rome has already allocated more than 16 billion euros to mitigate the impact of rising energy prices last year.
“We tax a portion of the extraordinary profits made by producers thanks to the higher cost of raw materials and redistribute these funds to struggling companies and families,” Draghi said.
Source: Capital
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