Italy intends to make its system of taxing the “excess profits” of energy giants, introduced last March, more “effective”. The new Minister of the Economy, Giancarlo Giorgetti, announced on Wednesday that the revenue from this system has fallen well short of expectations.
The device adopted by the former government of Mario Draghi “does not work or works much less well than expected,” because of the 10 billion euros targeted, only “2 or 3 billion” should be collected and “there are disputes,” he said before Parliament.
Giorgia Meloni’s new far-right government will make proposals to “try to put in place a system that works and produces results,” the minister explained as he presented the budget outline for 2023.
Mario Draghi’s government had introduced a 25% tax on the “extra” pre-tax profits of energy companies to finance measures intended to alleviate soaring prices for households and businesses.
For its part, the European Commission had announced at the end of September that it wanted to demand a “temporary solidarity contribution” from producers and distributors of gas, coal and oil who are making massive profits thanks to the surge in prices following the war in Ukraine.
Italy’s next budget will devote 21 billion euros to measures to support households and businesses in the face of soaring energy prices, Giorgetti confirmed.
To free up these additional resources to be financed by debt, the minister has raised the country’s public deficit forecast for 2023 to 4.5% of GDP, compared with the 3.4% forecast in September by the Draghi government.
The budget will be marked by “realism and responsibility, both to citizens and to those who invest in the Italian debt,” promised Giorgetti.
The new deficit reduction path adopted by the government “guarantees compliance with the budgetary rules set out in the Stability and Growth Pact,” which is currently being revised at the European level, he said.
However, the deficit for 2022 has been revised upwards to 5.6% of GDP, compared with the 5.1% forecast by Mario Draghi. Thereafter, the deficit is expected to fall to 3.7% in 2024 and 3% in 2025.
The European Commission proposed on Wednesday a modernization of its budgetary rules to better adapt the evolution of member states’ expenditures according to their level of indebtedness.
