By Oyintari Ben
In order to increase energy aid relief for individuals and businesses, Italy has approved a €35 billion ($36 billion) budget law that proposes to levy a windfall tax on additional profits produced by energy-selling enterprises.
According to a government statement issued during a late-night cabinet meeting on Monday, the new budget, which is the first to be presented by Giorgia Meloni’s right-wing government, intends to raise the tax rate on additional energy earnings from the current 25% to 35% in 2023, in accordance with European Union rules.
The law that the cabinet licensed is currently the subject of extensive parliamentary review and is yet open to revision before being officially approved.
In addition to the almost €75 billion previously spent by the government to maintain the economy, more than €21 billion of the budget will be devoted to assistance for households and companies dealing with excessive energy prices.
Giancarlo Giorgetti, the finance minister, told parliamentarians in Rome earlier this month that while Italy’s economic output increased by 0.5% in the third quarter, a decline is anticipated in the following three months.
The remaining funds will be used for additional initiatives, such as extending a flat tax rate on earnings up to €85,000 for independent contractors and lightly reviewing the current pension systems.
A highly polarizing choice that is expected to spark political debate is the government’s proposal to gradually repeal a citizen income that was implemented by the Giuseppe Conte administration.