Italy’s proposed exit tax causes ructions

Italy is working on changes to its proposed exit tax on wealthy individuals leaving the country, Economy Minister Giancarlo Giorgetti told industry lobby groups on Friday, after the proposal sparked criticism from tax experts and financial advisers. Reuters reported that the 2027 budget announced last month by Prime Minister Giorgia Meloni envisages a 26% levy on unrealised capital gains of individuals holding financial investments worth at least €800,000 ($885,000) who transfer their tax domicile abroad.

People attending a meeting in Rome with business associations on next year's budget said the minister announced that there were amendments to the scheme but he gave no further details. Wealth advisers said the exit tax could hurt Italy's appeal to their clients, reversing efforts by Meloni's predecessors to lure affluent individuals through generous tax incentives, according to Reuters. Advocates of wealth taxes point to growing inequality, with top earners becoming richer while real wages stagnate for low- and middle-income workers.

Reuters reported that Italy also triggered widespread criticism from the financial sector over €5.9 billion in higher taxes affecting it in 2027. Italy's biggest bank, Intesa Sanpaolo, strongly criticised these measures on Thursday, saying they could prompt the ECB to ask domestic lenders to lower their exposure to sovereign debt.