Italy’s government coalition has reached an agreement over a complex scheme that would see banks and insurers contributing about €11 billion ($12.8 billion) to its budget over three years.
The contribution affecting the financial and insurance sector would be worth around €4.3 billion for 2026, according to a budget document published Thursday. The document also foresees the contribution for 2027 and 2028.
The agreement introduces a new additional tax to finance healthcare and includes other measures such as an optional levy on the capital reserves set aside by lenders in exchange of avoiding paying a windfall tax in previous budgets and a postponement of fiscal benefits, according to Il Corriere della Sera.
The additional taxation would impact on the banks’ capital and profits, while lenders were aiming for measures that would have a neutral impact on their books.
Taxing the banking sector is a divisive issue for Meloni’s government and Matteo Salvini, of the League, and Antonio Tajani of Forza Italia previously clashed publicly on the tax.
Meloni’s coalition first attempted to impose a tax on banks’ windfall profits in 2023, but that effort ran aground amid a market backlash. Last year, ministers managed to find agreement with lenders to apply a levy that was ultimately income neutral for them, notching up a victory for the government while still keeping executives on board. Government is now proposing to let banks free up these capital reserves with a taxation of 27.5%, instead of the expected 40%.
The scheme will allow Meloni to finance tax cuts for middle earners, a key tenet of her platform for voters just as the country prepares for a general election in 2027 at the latest. Her finance minister, Giancarlo Giorgetti, announced earlier this week that the government will cut income tax for those earning between €28,001 ($32,679) and €50,000.
Photograph: Giorgia Meloni, Italy’s prime minister, arrives at the informal EU Council meeting in Copenhagen, Denmark, on Wednesday, Oct. 1, 2025. EU leaders are meeting to discuss a slate of defense projects. Photo credit: Nichlas Pollier/Bloomberg
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