Italian government considers extending fiscal measures
Italy's main banking stocks fell sharply on the Milan Stock Exchange on Wednesday amid reports of a plan by Giorgia Meloni's administration to increase the financial sector's contribution and strengthen fiscal consolidation.
According to information published by Bloomberg, Rome is considering extending the restriction requiring banks to suspend the use of deferred tax credits. This measure would raise up to €1.5 billion and, at the same time, reduce the tax burden on the middle class without compromising the deficit target, which the government seeks to keep below 3% by 2026.
Deferred tax credits and their impact
According to the newspaper Il Messaggero , following the freezing of €4 billion in tax credits planned for 2025-2026, the government is working on extending the measure for two additional years.
Deferred tax assets (DTAs) are credits generated by past losses that banks apply to future fiscal years to reduce tax payments. A temporary suspension of their use means that entities pay more tax in the short term, but less in the future when they finally apply them.
Political debate on bank taxes
The issue divides the ruling party itself. Deputy Prime Minister Antonio Tajani expressed his opposition to any extraordinary tax on the banking sector. However, days earlier, Finance Minister Giancarlo Giorgetti had suggested that banks, given their profitability, should collaborate more with families.
Industry sources stressed that any changes must be discussed and coordinated with the country's main financial institutions.
Reaction of the Milan Stock Exchange
bank stocks reflected the uncertainty with widespread declines. The most notable declines were:
-
Banca Monte dei Paschi di Siena: -4.1%
-
Intesa San Paolo: -3.25%
-
Mediobanca: -2.95%
-
BPM Bank: -3%
-
UniCredit: -0.24%
These declines demonstrate the market's sensitivity to the possibility of an increase in the sector's tax burden.
Key points
-
The Meloni administration is considering extending the suspension of deferred tax credits.
-
The measure seeks to raise up to an additional €1.5 billion
-
Tax credits (DTA) allow banks to reduce taxes in future years.
-
Antonio Tajani opposes an extraordinary tax on the sector.
-
Italian banks fell as much as 4.1% on the Milan Stock Exchange.
What are deferred tax credits (DTAs)?
They are accounting assets that allow banks to offset past losses and reduce tax payments in future years.
Why did Italian banks fall on the Milan Stock Exchange?
Shares plummeted due to reports that Giorgia Meloni's government is considering extending the suspension of deferred tax credits, which would lead to a higher immediate tax burden.
