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Italian energy companies avoid taxes, leaving Mario Draghi with shortfall in inflation package

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Many Italian energy companies appear to have defaulted on an initial unexpected tax payment due by the end of June, leaving the government with more than €9 billion in revenue shortfalls, a Finance Ministry document shows.

Rime Minister Mario Draghi has budgeted €33 billion since January to help businesses and homes facing sky-high electricity, gas and petrol costs as the Ukraine crisis weighed on growth prospects for the eurozone’s third-largest economy.

Between €10 billion and €11 billion of the full package was expected to be funded by a 25 percent windfall tax on energy companies that have benefited from rising oil and gas prices.

Under the program, manufacturers and sellers of electricity, natural gas and gasoline products were supposed to make a 40 percent deposit by the end of June, with the rest by November.

But updating budget forecasts in the half-year budget, a Finance Ministry document presented to Parliament this week showed lower-than-expected revenue totaling more than 9 billion euros from total income taxes.

“Updated estimates reflect a downward revision of expected windfall tax revenues,” the Treasury Department said in the document, without naming those who didn’t comply.

However, this currently has no impact on Italy’s public finance targets, as rising consumer prices and energy costs have raised indirect taxes such as VAT.

State-controlled energy group Eni said last week it had already paid its first installment of the windfall tax.

Meanwhile, Italy’s largest energy company Enel said in an emailed statement that the windfall tax would have an impact of around €70 million in 2022, with around €50 million already taken into account in the first half of the year.

Last week, Enel said it expects a negative impact of 2.6 billion euros on its net debt this year due to government measures in Italy, Spain and Romania.

Several energy companies complained about the windfall tax, saying volatile prices are also causing them problems.

Companies that missed the end of June deadline still have the opportunity to pay the levy in the coming weeks.

https://www.independent.ie/business/world/italian-energy-firms-shirk-tax-and-leave-mario-draghi-with-inflation-package-shortfall-41886076.html Italian energy companies avoid taxes, leaving Mario Draghi with shortfall in inflation package

Fry Electronics Team

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