Italy on Friday announced it would tax the extra profits made by energy firms off the back of spiking prices to help families and businesses struggling with high bills.
“Let’s tax a part of the extraordinary profits that producers are making thanks to the increase in the cost of raw materials, and redistribute this money to businesses and families who are in great difficulty,” Prime Minister Mario Draghi told reporters.
Economy and Finance Minister Daniele Franco told the same news conference that the tax would be 10 percent on a portion of the extra profits made, although the details were not yet clear.
A government source told AFP it would be levelled on a measure of extra profits made in the last six months, compared to the same period the year before.
The money will help fund a new €4.4-billion package to ease the pain of high energy prices, Draghi said, which comes on top of €16 billion already spent in recent months.
The package will also be funded by extra tax revenue generated by the increase in energy prices and will not require additional borrowing, the source told AFP.
Countries across Europe are urgently seeking policies to ease the pain of high energy prices, which were already high and sent soaring by Russia’s invasion of Ukraine.
Among the new Italian measures intended to address what Draghi said was a period of “major volatility” are a cut in excise duty on petrol, to reduce the pump price by €0.25 a liter for one month only.
The government will also freeze energy bills at last summer’s prices for another 1.2 million households, bringing the total to 5.2 million.