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29 Nov, 2022 06:08

Italy to impose new tax on energy companies – Reuters

The levy will reportedly apply to excess revenues from surging fuel costs
Italy to impose new tax on energy companies – Reuters

The Italian government is planning to apply a 50% windfall tax to the income that energy companies have received due to the rise in global oil and gas prices, Reuters reported on Monday, citing a draft of the country’s 2023 budget.

According to the report, it will be applied to the part of a company’s 2022 income which is found to be at least 10% higher than its average between 2018 and 2021.

However, the tax will be capped at 25% of the value of each company’s net assets as of the end of 2021. Under the terms set out in the budget, it is expected that about 7,000 companies producing and selling natural gas, electricity, and petroleum products will be targeted by the new tax.

Last week, Italy’s Treasury presented a different version of the draft budget, with a 35% tax instead of 50%, which was to be calculated based on profits instead of income. The current tax on energy companies in the country is 25%.

The final version of the budget is still to be officially released.

Italy is grappling with soaring inflation, which reached a 40-year high last month. Prices jumped by 11.9% in October, driven mostly by energy costs, which rose by 71.1% year-on-year, official data shows.

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