Italy Approves 2027 Budget Raising Bank, Insurer and Energy Taxes to Fund €26 Billion Stimulus

Italy's cabinet approved a 2027 budget that raises taxes on banks, insurers, energy companies and the gambling sector to help fund €26 billion ($28.91 billion) in tax cuts and spending increases, Prime Minister Giorgia Meloni said Tuesday. The package, the last under her government before an election due next year, targets a deficit of 3.4% of GDP, above the EU's 3% ceiling and up from 2.9% expected in 2026. Financial firms must contribute more than €5 billion, while energy companies and the gambling sector will each provide €700 million. The IRES corporate tax rate rises to 30.5% from 27.5% for banks and to 27% from 24% for insurers. Meloni also said she would hike the tax on financial transactions. "There was no opportunity to reach a prior agreement with the financial sector, which I would nevertheless like to thank," she said. The budget expands the 33% income tax bracket to earnings up to €55,000 and cuts the self-employed rate to 15% on income up to €100,000, raising the threshold from €85,000. About half the measures are funded through the EU's "National Escape Clause."