Italy Says It Won’t Seek Tax on Extra Companies Profits

(Bloomberg) — Italy will seek ways to finance the nation’s budget with a direct contribution from banks and companies, but it won’t put a tax on extra corporate profits.

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The government is hoping for a contribution from those who have benefitted the most from particularly favorable conditions, according to a government official. But it wouldn’t resort to a levy on profits.

An upfront payment of withholding tax due by clients that will be recovered over the time via future cash flow or the postponement of deferred tax assets are among potential solutions banks are open to discussing with the finance ministry, according to people familiar with the lenders’ thinking, who asked not to be named as not authorized to speak publicly.

Bloomberg previously reported that Prime Minister Giorgia Meloni was looking for a way to extract a levy from banks and insurers to help finance the country’s budget. The government was also looking at expanding the measure to other sectors including energy.

Meloni needs to raise cash as she seeks to keep voters onside amid a squeeze on Italy’s public finances. She has repeatedly said that the financial sector should help support families that have suffered from high interest rates while banks have profited.

Finance Minister Giancarlo Giorgetti is due to present the 2025 budget in the coming weeks.

“Everyone will do their part,” Deputy Prime Minister and League leader Matteo Salvini told Ansa newswire earlier in the week, saying banks and insurers had to help the economy as much as artisans and workers.

–With assistance from Alessandra Migliaccio and Antonio Vanuzzo.

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