Italy energy firms banned from passing on new tax

Economy Minister Giulio Tremonti has dubbed his hiking of the main tax on company profits (IRES) to 33% from 27.5% as a “Robin Hood” tax as the extra revenues will be taken from wealthy companies and spent on the needy.

Energy companies initially protested but have since played down the impact of the tax. Fulvio Conti, chief executive of power utility Enel said the tax would be “easily absorbed” by his group. Media had speculated that the tax on oil, gas and electricity companies, would mean an extra burden to consumers already facing higher costs due to rising oil prices.

But in the text of the law, published on the Treasury’s website on Wednesday, that was ruled out. “It is forbidden for the economic operators in the sectors ... to move the burden of the increased tax onto consumer prices,” it said, adding that the sector’s regulatory watchdog would enforce the policy. Tremonti has said the government hopes to earn an additional €5.7 billion ($8.88 billion) over a three year period from increased taxes on energy companies as well as banks and insurers. (Reuters)