Italy's windfall tax on banks can be improved on, economy minister says

ITALY’S new tax on bank profits can be improved on, economy minister Giancarlo Giorgetti said on Sunday (Sep 3), denying that the new levy was unjust.

“It may be that the tax is inappropriate, it can certainly be improved upon ... but I do not accept that it is considered an unfair tax,” Giorgetti said at The European House - Ambrosetti economic forum.

Last month, Italy’s government dealt a surprise blow to the country’s banks by imposing a one-off 40 per cent tax on lenders’ profits resulting from higher interest rates, after reprimanding lenders for failing to reward deposits.

Bank shares tumbled before the economy ministry clarified that the new tax would amount to no more than 0.1 per cent of their total assets.

About 33 per cent of the attendees polled by the forum organisers were “very negative” on the measure, and two-thirds were overall negative on it.

Giorgetti countered this view saying that it was a fair tax and the state had given a lot in the way of guarantees to the banking system.

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The minister also apologised for the clumsy handling of the move, announced as a surprise at a news conference late on a Monday in August by the deputy prime minister.

“I can assure you that I take full responsibility for communication errors, but in the end the final version will be something that everyone can appreciate,” Giorgetti said. REUTERS