Italian windfall tax off to a slow start: press
The government of Italy expects tax revenues to fall short of expectations amid disappointing compliance with its new 25% windfall tax on energy sector companies, Reuters reported August 2, citing an Italian treasury document.
Italian critics have slammed the windfall tax for failing to reflect fluctuating wholesale costs in energy companies. The initial deadline for paying the charge was June 30, and businesses that missed it need to pay accrued interest and penalties, Reuters said.
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The news will come as a blow to outgoing Italian premier Mario Draghi, who recently resigned amid a rift in his governing coalition, with a snap general election now scheduled for September 25. Draghi's so-called "unity" government has pursued economic stimulus in Italy, after years of austerity-focused fiscal discipline.
Rome does not expect any material impact to public accounts - it says indirect taxes such as VAT will compensate given rising consumer prices - but it has written off €9bn from its mid-year budget estimates for income tax revenue. Since January, Draghi has budgeted around €33bn in taxes to assist Italy's economy and households dealing with a cost-of-living crisis. Windfall levies on energy companies were expected to account for €10-15bn of this intake.
Under the new tax law, a 40% down payment should have already been filed by all Italian gas producers and sellers, as well as power and petrol product businesses. The remainder of the charge is due in November. Italy's state-controlled oil and gas major Eni has confirmed making the June payment, while Italian utility Enel has set aside €2.6bn in funds which also must cover windfall taxes in Spain and Romania.