Italian Government Considers New Bank Tax Amid Financial Strategy Revisions
Amid ongoing discussions regarding financial reforms, the Italian government is contemplating a new tax targeting bank profits, which officials suggest could fall between 4 percent and 6 percent on earnings exceeding those generated between 2020 and 2022, reports 24brussels.
This proposed tax, applicable for a two-year period starting in 2025, has the potential to generate between €2.5 billion and €3 billion. The concept resonates with a similar initiative from the hard-right League, a significant proponent of bank taxation within Prime Minister Giorgia Meloni’s coalition. According to a lawmaker familiar with the proposal, its legal viability is bolstered by Spain’s implementation of a comparable measure. However, a spokesperson from the Treasury has refuted claims that discussions on the tax are underway.
Regardless of its legislative fate, the proposal signals a shift in the government’s approach to financial institutions, moving away from Meloni’s previous stringent policies. This shift follows the backlash after her 2023 attempt to implement a 40 percent windfall tax, which was ultimately softened in response to tumbling bank stocks. Instead, a temporary measure has been adopted that mandates banks to temporarily forgo lucrative tax credits, a policy expected to extend into the current year.
The newly considered tax is being reframed from a populist measure into a structured fiscal tool, aimed at redirecting a portion of the sector’s extraordinary profits towards social and economic support initiatives. According to a memo circulated within Italian banking circles, the proposal is described as “credible, limited, and technically sound — not a punitive gesture, but a pragmatic way to raise a few billion euros without destabilizing the market.”
A significant aspect of this proposal involves redistributing profits to households, mortgage holders, and businesses that have been adversely affected by elevated interest rates, highlighting an increasing awareness of the economic imbalances stemming from European monetary policy.
This recognition is anticipated to lessen opposition from the Bank of Italy, which previously criticized the 2023 windfall tax initiative. Current indicators suggest that banks possess sufficient resilience to absorb new levies, and regulatory authorities are expected to remain passive—even if they have reservations regarding the measure, according to insights from a senior Bank official who spoke on condition of anonymity.
