- Italy has collected around 2.8 billion euros ($3.07 billion) from this year’s windfall tax on energy companies, people familiar with the matter told Reuters on Monday.
- Italy has promised to gradually phase out the expansionary fiscal policy adopted in 2020 after the COVID-19 pandemic and the energy crisis.
Italy has collected around 2.8 billion euros ($3.07 billion) from this year’s windfall tax on energy companies, people familiar with the matter told Reuters on Monday. The tax take is slightly above government expectations. The Treasury in December estimated the levy would yield around 2.6 billion euros. A Treasury spokesperson said it could not confirm the figures as they were not definitive.
The levy has a rate of 50% of 2022 corporate income, which is at least 10% higher than the average income reported between 2018 and 2021. Under the terms set in the 2023 budget, around 7,000 producers and sellers of electricity, gas and petrol products were required to pay the levy. The general payment deadline was end-June, although some firms are allowed until July.
This year’s windfall tax replaced a levy in 2022 that reaped a similar amount of money but triggered criticism and refusals to pay from multiple firms. Energy Minister Gilberto Pichetto Fratin said last week he was confident the government could avoid a repeat of such levies in future, as a spike in energy prices is progressively reversing. The Dutch front-month contract, a benchmark for the European gas market, hovered around 32 euros per megawatt-hour (MWh) on Monday, sharply down from 70 euros in early 2023 and a peak of around 340 euros/MWh in August 2022, when Russian gas supplies dwindled following Moscow’s invasion of Ukraine.
Italy has promised to gradually phase out the expansionary fiscal policy adopted in 2020 in the wake of the COVID-19 pandemic and the energy crisis. Prime Minister Giorgia Meloni’s government is targeting a 2023 deficit of 4.5% of gross domestic product (GDP), almost half the 8.0% ratio in 2022. However, public finances have gotten off to a bad start this year.