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Italy collects around $2 billion from energy windfall tax, sources say

Italy collects around $2 billion from energy windfall tax, sources say
Italy collects around $2 billion from energy windfall tax, sources say   -   Copyright  Thomson Reuters 2022   -  
By Reuters

<div> <p><span class="caps">ROME</span> – Italy has collected only around 2 billion euros ($2 billion) from a contested windfall tax on energy companies, leaving the Treasury facing a potential multi-billion revenue shortfall, two government sources told Reuters on Friday.</p> <p>Prime Minister Mario Draghi has budgeted 52 billion euros since January to help firms and households facing sky-high electricity, gas and petrol costs, as the Ukraine crisis weighed on growth prospects for the euro zone’s third largest economy.</p> <p>Between 10 and 11 billion euros of the total package was originally expected to be funded through a 25% windfall tax on energy groups that have benefited from surging oil and gas prices.</p> <p>Under the scheme, a 40% down-payment worth more than 4 billion euros was from companies due by the end of June.</p> <p>But thousands of companies refused to pay and some of them publicly complained about the levy, saying that volatile energy prices were also creating problems for their businesses.</p> <p>In response, Draghi last month approved a measure establishing that the down-payment would carry a 30% surcharge if paid by Aug. 31, after which it would rise to 60%.</p> <p>Despite the deadlines, the Treasury estimated it had raised less than 1 billion euros by end-June and only an additional 1 billion by Aug. 31, the sources said.</p> <p>Almost 30% of what has been raised comes from state controlled group Eni, which complied with the scheme paying so far around 560 million euros.</p> <p>However, the revenue shortfall has no impact on Italy’s public finance targets at present, as rising consumer prices and energy costs are lifting indirect taxes such as its <span class="caps">VAT</span> sales tax.</p> <p>What has been collected in August from the windfall tax is part of a 6.2 billion euro of extra support unveiled on Thursday. Rome plans to use the resources to help fund a new relief package worth up to 13 billion euros.</p> <p>The Treasury is also studying some changes to the windfall tax aimed at reducing litigation risks, as several energy companies are filing appeals, the sources said. ($1 = 0.9907 euros)</p> <p/> </div>