Amendment to windfall tax aims to reassure markets – Tajani – English

(ANSA) – ROME, SEP 24 – A draft government amendment to the
‘assets’ decree introducing a controversial windfall tax on
surplus profits made this year by the country’s banks following
the ECB’s interest-rate hikes aims to reassure the markets,
Deputy Premier and Foreign Minister Antonio Tajani said on
Sunday.

   
“The objective is not to do the banks a favour, but to ensure
that savers are better protected, that the banking and financial
system is considered an important instrument of economic
policy,” Tajani told current affairs programme ‘In Mezz’ora’ on
Rai 3.

   
“With a well-written regulation, the international markets are
reassured,” he continued.

   
Tajani was quick to voice criticism of the new 40% windfall tax
on banks’ surplus profits announced allegedly “without
discussion” by Premier Giorgia Meloni in August, and which
caused immediate stock market turmoil.

   
The losses were partially reversed after the government said the
windfall tax would be capped at 0.1% of institutes’ assets, but
skepticism remained, with Moody’s saying the measure is “credit
negative” and the Financial Times describing the move as
“disastrous” and the government’s “biggest blunder so far”.

   
“Common sense has prevailed, I spoke at length with the Prime
Minister, I was listened to and with Minister Giorgetti we tried
to improve that text,” Tajani told In Mezz’ora.

   
The new draft amendment to the assets decree currently before
parliament for conversion into law “allows for a different tax
base and excludes government bonds”, he said.

   
“Money will come from the banks but we have protected the small
ones, and we have strengthened the system,” concluded Tajani.

   
On Saturday it was reported that under the new provision,
instead of paying a tax on surplus profits banks would have the
option of “allocating an amount equal to two and a half times
the tax to a non-distributable reserve”.

   
This reserve is to be considered “among the elements of primary
tier 1 capital”, according to the draft.

   
Reportedly, the tax will now be calculated “by applying a rate
of 40% on the interest margin” in the 2023 financial year “that
exceeds by at least 10% the same margin” in the 2021 financial
year.

   
In the original decree the tax was calculated on the basis of
the 2022 and 2023 budgets and different rates applied.

   
Lastly, the government has reportedly raised the cap on the
windfall tax from 0.1% to 0.26% “of the total amount of
individual risk exposure” rather than on total assets as in the
original formulation, meaning that treasury bonds are excluded
from the levy. (ANSA).