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Italy facing more than $9 billion shortfall on energy windfall tax -document

·2-min read
FILE PHOTO: Power lines connecting pylons of high-tension electricity are seen in Montalto Di Castro

By Giuseppe Fonte

ROME (Reuters) -Many Italian energy companies appear not to have paid an initial windfall tax payment due by the end of June, leaving the government facing a revenue shortfall of more than 9 billion euros ($9.2 billion), a Treasury document showed.

Prime Minister Mario Draghi has budgeted 33 billion euros since January to help firms and households facing sky-high electricity, gas and petrol costs, as the Ukraine crisis weighed on growth prospects for the euro zone's third largest economy.

Between 10 and 11 billion euros of the total package was expected to be funded through a 25% windfall tax on energy groups that have benefited from surging oil and gas prices.

Under the scheme, producers and sellers of electricity, natural gas and petrol products should have made a 40% down payment by the end of June with the rest due by November.

But updating fiscal projections in the mid-year budget, a Treasury document presented to parliament this week showed lower-than-expected revenues totalling more than 9 billion euros stemming from income taxes as a whole.

"Updated estimates take into account a downward revision on expected windfall tax revenues," the Treasury said in the document, without identifying those who had not complied.

However, there is no impact on Italy's public finance targets at present, as rising consumer prices and energy costs have lifted indirect taxes such as its VAT sales tax.

State-controlled energy group Eni said last week it had already paid its first instalment of the windfall tax.

Meanwhile, Italy's biggest utility Enel said in an emailed statement that the windfall tax would have an impact of around 70 million euros in 2022, with around 50 million euros already accounted for in the first half of the year.

Last week, Enel said it expected a negative impact of 2.6 billion euros on its net debt this year due to government measures in Italy, Spain and Romania.

Several energy firms complained about the windfall tax, saying volatile prices were also creating problems for them.

Companies that missed the end-June deadline still have the opportunity to pay the levy in the coming weeks or months with accrued penalties and interest, the document added.

The government said it planned to approve this week a new relief package worth 14.3 billion euros in what will be one of the last major acts of the Draghi government before a national election next month.

($1 = 0.9770 euro)

(Reporting by Giuseppe Fonte; Editing by Keith Weir, Bernadette Baum and Alexander Smith)

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