ITALY NEWS

Modern-Day Robin Hood

Levy to aid low-income households
(issue no. 83/2008 / July 10, 2008)

Italy will tax the rich and give to the poor. To offset the ever-increasing burden of fuel and food costs, Economy minister Giulio Tremonti recently announced plans to impose an additional levy on those who benefit the most from oil profits: the country's energy companies. Dubbed the Robin Hood tax by the national media, the government will increase the corporate tax bracket rate for oil companies from 27 percent to 33 percent.

 

Tremonti says the increase will be used to aid those hardest hit by rising oil and food prices. The additional tax revenue will subsidize a card with which pensioners can receive a discount on groceries and energy bills. The Robin Hood tax is part of a three-year budget plan featuring public spending cuts as well as development measures, including a plan to re-start the country's nuclear power program. The plan, already approved by the Cabinet, is waiting for approval in Parliament.

 

Although the association of Italy's oil companies called the measure ‘punitive', and other high-profit industries have criticized the move, Tremonti says the government will soon introduce additional taxes on other profit-making industries, such as banks and insurance companies.

 

Economists argue that Italy's energy companies will not suffer much from the Robin Hood tax. According to estimates, the tax will probably cost Italy's leading oil company, Eni, 300 million additional euro, a relatively low figure for a group that recently reported first-quarter profits of 3.3 billion euro.

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