Tax on extra profits. Here we go again. As happened on the eve of the 2024 Budget, this year too there is talk of a possible levy on credit institutions. The majority is divided (Forza Italia continues to be completely against it) and the markets react just by hearing about it (yesterday Piazza Affari closed in the red, at -0.24%).
Lega and Fratelli d’Italia propose a one-off contribution, called “solidarity”, which provides for a percentage varying between 1% and 2% on banks’ extra profits. The goal is to ask credit institutions to contribute more to state coffers. But Forza Italia remains opposed to any type of tax on extra profits. Deputy Prime Minister Antonio Tajani has declared that such a levy would damage “proximity banks” and create instability on financial markets.
Italian banks’ profits have grown significantly in recent years, driven by the continuous rise in interest rates, going from around 25 billion in 2022 to over 50 billion estimated for this year by the Federazione Autonoma Bancari Italiani (Fabi). Last year, the taxation attempt ended with nothing.
In August 2023, the discussion on the tax on extra profits (which was estimated to bring 2.5 billion to the state coffers) ended with an amendment that gave banks the option to choose whether to pay the tax or allocate the equivalent amount to capital reserves. The banks, as expected, opted en masse for the second solution. So the state did not collect a cent. The only positive note, according to the government, was the strengthening of the banks’ capital, which contributed to improving the country’s ratings, leading to a lowering of the spread and, consequently, to savings on the cost of interest on public debt. So there was a benefit, albeit indirect, for Italy.
Now we are back to discussing. While there are countries where state coffers are cashing in having asked banks to contribute more. Spain, first of all, where almost 2 billion euros should arrive from taxation this year. In Madrid the levy on bank profits brings in about 1.2 billion euros per year: 1.3 in 2023 and an estimated 1.7 in 2024. In Hungary it is 640 million euros, in the Czech Republic 600 million, in Slovakia 340 million and in Lithuania 250 million (IMF data).
