The Italian government greenlighted on Wednesday a decree that sees doubling to 200,000 euros ($218,220) a year the so-called "flat tax" applied to income earned abroad by wealthy individuals who transfer their tax residence to the country.

The incentive, introduced in 2017 under a center-left government, aimed to lure rich people to Italy in the hope that it would benefit the economy.

However, Economy Minister Giancarlo Giorgetti told reporters Italy was now against the idea of countries competing with each other to offer "fiscal favors" to the wealthy.

The government's decision may also make a small contribution to bolstering Rome's public finances as Prime Minister Giorgia Meloni prepares a 2025 budget aimed at narrowing the country's wide fiscal gap.

One high-profile beneficiary of the scheme was Portuguese football star Cristiano Ronaldo, who moved his tax residence to Italy between 2018 and 2021 when he played for Juventus.

Giorgetti said some 1,186 taxpayers had taken advantage of the flat tax, while Italy's audit court has estimated that between 2018 and 2022 taxes paid under the scheme amounted to 254 million euros.

The EU criticized the measure as unjust and detrimental to state accounts.

"The high-net-worth individuals regimes of Greece and Italy are ... the most harmful because they offer large exemptions to extremely rich individuals," the bloc's Tax Observatory said in its Global Tax Evasion Report this year.