2023-08-10 05:01:00
The far-right government of Giorgia Meloni qualified this Wednesday its plan to tax the multimillion-dollar profits of banks in Italy. “In order to preserve the stability of banking institutions,” the decree provides for “a ceiling for the contribution that cannot exceed 0.1 percent of the total assets” of a bank, the Ministry of Economy announced after the collapse in the Italian stock market and in the rest of Europe caused by the announcement of the tax.
The surprise decision of the right-wing and extreme right-wing coalition to apply a 40 percent tax to the “surplus profits” of the banks generated by the rise in interest rates caused an earthquake in the titles of the financial sector on the stock market. The two main banks in the country, Intesa Sanpaolo and Unicredit lost 8.6 and 5.9 percent respectively, at the close of the Milan market. The sector, however, was trading higher on Wednesday afternoon on the local stock market.
“We have decided to introduce a 40 percent tax on the unfair difference in net interest income,” that is, the difference between what “banks charge you for lending you money and what they grant you when you deposit money,” said the Italian Prime Minister Giorgia Meloni on Wednesday in a video posted on her Facebook account.
Like their European competitors, Italian banks massively increased their net income thanks to interest, but they did not increase the remuneration of their clients’ current accounts. The proceeds from taxing “unfair margins of the banks” will be used to “finance support measures for households and companies” that are going through difficult times due to the high cost of money, Meloni assured.
Matteo Salvini, vice president of the Italian government, assured that “with the extraordinary rate we want to confirm the increase in salaries and pensions for next year.” The income from this tax “will reach those who have mortgages that are increasing disproportionately due to the variable rate and will end up in the Budget Law in a few weeks to confirm the lower taxes and the increase in wages,” explained the leader of the pro-government Lega in statements to public radio Rai.
“The reasoning that the government makes is that of the higher profits that the banks will obtain this year compared to the previous one, a part will be used to help families and confirm the increase in wages,” Salvini warned. “Although some bankers regret it, the sector is obtaining billions of euros in profits without lifting a finger by virtue of the decisions of others. I think redistributing a small part is an economic and social duty,” added the Minister of Transport and Infrastructure.
The extraordinary tax, which must be implemented before June 2024, will affect the fiscal years of 2022 and 2023. The 40 percent rate will be applied either to the part of the interest margin of 2022 that exceeds the amount of the fiscal year of 2021 by at least five percent, or on the profits of 2023 whose threshold is set at ten percent.
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