Italy approves 2027 budget with tax hikes on banks and energy firms

Italy's cabinet has approved the 2027 budget, which includes tax hikes on banks, insurers, energy firms, and the gaming industry to finance the government's deficit. The expansionary package, targeting a projected 3.4% budget deficit for 2027, marks a significant increase from the 2.9% deficit expected in 2026. Additionally, the budget aims to lower the fiscal burden for middle earners and the self-employed while increasing funding for the national health service.

Financial firms will contribute over €5 billion, while energy companies and the gaming sector will each provide €700 million. The government intends to raise Italy's tax on financial transactions and has designed the higher tax burden to avoid negatively impacting banks' capital ratios. The budget also introduces new tax cuts and spending hikes, with the self-employed facing a reduced tax rate of 15% on annual income up to €100,000.

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