Italy Decides on Tax Increases for Banking and Energy Sectors

The Council of Ministers, meeting under the chairmanship of Italian Prime Minister Giorgia Meloni, approved an expansionary budget plan of 26 billion euros for 2027, aimed at supporting middle-income earners and strengthening the healthcare system. To finance the budget, additional obligations were imposed on banks, insurance companies, the energy sector, and the gambling industry.

Due to the impact of the new incentive and support package, the country's budget deficit-to-GDP ratio is expected to increase. The budget deficit ratio, projected at 2.9 percent for 2026, is targeted to rise to 3.4 percent next year, exceeding the European Union's 3 percent ceiling.

Within the scope of financing the expansionary budget, additional resources were requested from sectors reporting high profitability. While financial institutions are required to contribute more than 5 billion euros to the budget, energy companies and the gambling sector will each transfer an additional 700 million euros in resources.

Following the cabinet meeting, Prime Minister Meloni stated that they have allocated 3.4 billion euros to the National Health Fund. She also noted that the exemption from vehicle ownership tax for small and medium-sized vehicles will be permanent and structural starting next year, and that citizens will be able to have custom license plates on their vehicles consisting of letters and numbers of their choice.

The 2027 budget is expected to be discussed and voted on in the upper and lower houses of parliament within the coming month.