Italy economy minister defends windfall bank tax as ‘not unfair, but can be improved’
State has given banking system a lot in the way of guarantees, Giancarlo Giorgetti says at economic forum
03 September 2023 - 19:19
byGiselda Vagnoni and Giancarlo Navach
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Italian economy minister Giancarlo Giorgetti votes at the lower house of parliament in Rome, Italy, December 23 2022. Picture: REMO CASILLI/REUTERS
Cernobbio — Italy’s new tax on bank profits can be improved on, economy minister Giancarlo Giorgetti said on Sunday, denying the new levy is 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.
In August, Italy’s government dealt a surprise blow to the country’s banks by imposing a one-off 40% tax on lenders’ profits resulting from higher interest rates, after reprimanding lenders for failing to reward deposits.
Bank share prices tumbled before the economy ministry clarified that the new tax would amount to no more than 0.1% of their total assets.
About 33% of the attendees polled by the forum organisers were “very negative” on the measure, and two-thirds were overall negative on it.
Giorgetti, a member of the League party, countered this view saying that it is a fair tax and the state has given a lot in the way of guarantees to the banking system.
However, the minister apologised for the clumsy handling of the draft proposal, 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,” said Giorgetti.
The co-ruling Forza Italia party wants to exclude returns on government bonds from the new levy, its leader Antonio Tajani said in Cernobbio, so that it does not affect the future auctions of government bonds.
Forza Italia is also seeking an exemption for small banks and wants a guarantee the levy will not be extended beyond 2023.
Giorgetti did not comment on his government ally’s proposals on the bank tax. He also gave no indication about when Monte dei Paschi di Siena bank will be privatised, despite Tajani’s call for swift action.
“We will solve [it] calmly but without letting anyone dictate the timings as far as the banking system is concerned,” said Giorgetti.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Italy economy minister defends windfall bank tax as ‘not unfair, but can be improved’
State has given banking system a lot in the way of guarantees, Giancarlo Giorgetti says at economic forum
Cernobbio — Italy’s new tax on bank profits can be improved on, economy minister Giancarlo Giorgetti said on Sunday, denying the new levy is 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.
In August, Italy’s government dealt a surprise blow to the country’s banks by imposing a one-off 40% tax on lenders’ profits resulting from higher interest rates, after reprimanding lenders for failing to reward deposits.
Bank share prices tumbled before the economy ministry clarified that the new tax would amount to no more than 0.1% of their total assets.
About 33% of the attendees polled by the forum organisers were “very negative” on the measure, and two-thirds were overall negative on it.
Giorgetti, a member of the League party, countered this view saying that it is a fair tax and the state has given a lot in the way of guarantees to the banking system.
However, the minister apologised for the clumsy handling of the draft proposal, 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,” said Giorgetti.
The co-ruling Forza Italia party wants to exclude returns on government bonds from the new levy, its leader Antonio Tajani said in Cernobbio, so that it does not affect the future auctions of government bonds.
Forza Italia is also seeking an exemption for small banks and wants a guarantee the levy will not be extended beyond 2023.
Giorgetti did not comment on his government ally’s proposals on the bank tax. He also gave no indication about when Monte dei Paschi di Siena bank will be privatised, despite Tajani’s call for swift action.
“We will solve [it] calmly but without letting anyone dictate the timings as far as the banking system is concerned,” said Giorgetti.
Reuters
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