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Italy collects around 2.8 billion euros from 2022 energy windfall tax

Italy collects around 2.8 billion euros from 2022 energy windfall tax
© Reuters. FILE PHOTO: Italy’s newly appointed Economy Minister Giancarlo Giorgetti looks on during the swearing-in ceremony at Quirinale Presidential Palace in Rome, Italy October 22, 2022. REUTERS/Guglielmo Mangiapane

By Giuseppe Fonte

ROME (Reuters) -Italy has so far collected around 2.8 billion euros ($3 billion) from a contested windfall tax on energy companies in force for this year only, Economy Minister Giancarlo Giorgetti told parliament on Wednesday.

The figures suggest that the Treasury faces a multi-billion revenue shortfall, although its full extent has yet to be established.

The levy, which has triggered criticism from multiple firms, has a 25% rate and is calculated on the value of transactions subject to VAT sales tax.

“As at Nov. 30, payments amount to around 2.757 billion (euros), a sum which is in line with the updated government estimates,” Giorgetti said.

Former Prime Minister Mario Draghi’s administration had originally estimated revenues worth between 10 and 11 billion euros on energy groups that have benefited this year from surging oil and gas prices.

But thousands of companies refused to pay and some of them publicly complained about the levy, saying that volatile energy prices were also creating problems for their businesses.

Sources told Reuters in September that Rome had collected just above 2 billion euros from a 40% down-payment made by the end of August.

The final payment was due by Nov. 30 but Giorgetti said energy groups would still be able to catch up on payments by Dec. 15 without fines.

Next year, Prime Minister Giorgia Meloni plans to collect 2.6 billion euros through a revised one-off windfall tax calculated on surplus income instead of VAT-liable operations, according to the government’s 2023 budget which is currently making its way through parliament.

The new scheme has a rate equal to 50% of the part of 2022 corporate income which is at least 10% higher than the average income reported between 2018 and 2021.

An additional 1.4 billion euros is expected to stem from a price cap on energy produced by plants fuelled by coal, fuel oil and renewable sources.

The cap is set at 180 euros per megawatt hour under regulation laid out by the European Commission.($1 = 0.9398 euros)

Source: Investing.com

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