Italy’s far-right government has approved a budget for next year of about 30 billion euros ($33 billion), which officials say will be partly funded by a levy on Italian banks and insurers.
Prime Minister Giorgia Meloni said late Tuesday that the government expected to raise some 3.5 billion euros from banks and insurance companies to ensure better public services, especially the country's struggling health service, and help the most vulnerable citizens.
"As we promised, there will be no new taxes for citizens,” Meloni wrote in a post on X.
The changes in tax rules for banks, insurance products and business licenses for gaming are to raise roughly 4 billion euros, Reuters reported on Wednesday.
The 2025 budget law was agreed by ministers at a cabinet meeting late Tuesday, just in time to meet a deadline to submit the plan to the European Union. The measures still need to be approved by the Italian parliament, with a final vote expected by the end of the year.
Economy and Finance Minister Giancarlo Giorgetti had been under intense pressure for weeks to reconcile the need to speed up Italy’s deficit reduction – closely watched by the EU – with the government’s expensive electoral promises.
"Someone would call it an extra profit (tax), I call it a sacrifice,” Giorgetti said at a press conference on Wednesday, commenting on the new levy on banks and insurers.
He told reporters on Wednesday that banks and insurers would contribute to the state finances with "more than 3.5 billion euros" next year.
"I think the affair has been interiorized by the markets, so it goes as it should. The fishermen and workers will be happy after this budget, a little less so the banks," Giorgetti said.
His deputy Maurizio Leo said the budget would be frozen for the next two years deductions related to banks' tax credits stemming from past losses, known as deferred tax assets, in a move that would temporarily hike taxation on profits.
The Treasury expects to collect 1 billion euros from insurers by changing the payment terms of stamp duties due for some insurance policies.
Rome also changed the taxation of stock options for managers. "We defer the deduction to the time when there is actual allocation of the shares," Leo said.
The minister revisited a prior plan by the right-wing government, which has repeatedly criticized banks for gaining excessively from higher interest rates.
A first attempt to tap lenders with a 40% windfall tax failed last year, after the move sparked a major sell-off in Italian banking stocks, forcing the government to withdraw the plan.
Vice-Premier Antonio Tajani said in a post on X that the new contribution from banks will "not frighten the markets.”
Giorgetti said on Wednesday that additional resources will also come from a "spending review” imposed on Italian ministries, which have been asked to tighten their belts and propose spending cuts.
The 2025 budget also includes permanent cuts to income tax and social contributions for middle- and low-income earners, one of Meloni's main electoral pledges.
To fund the new package of measures, Italy will widen next year’s deficit to 3.3% of gross domestic product (GDP) from an estimated 2.9%.
Rome is under pressure to keep its accounts under control, after having been placed under special monitoring by Brussels for running deficits far in excess of the EU’s 3% limit and for not reducing its mammoth debt, now close to 3 trillion euros.
