Italy is considering raising the IRAP tax on energy companies or extending the existing 5.9% rate through 2029 to help fund tax cuts and higher public spending under its 2027–2029 budget plan.
Italy may raise taxes on energy companies to fund tax cuts and higher spending, sources close to the matter told Reuters on 23 October 2026. The plan would shape the government’s budget for 2027 to 2029, due next week.
The IRAP tax has already gone up
In February, Italy raised the IRAP (Imposta Regionale sulle Attività Produttive) corporate tax on energy firms from 3.9% to 5.9% for 2026 and 2027. The government expected the change to bring in about EUR 1 billion over the two years. Officials are now weighing a further increase or extending the 5.9% rate through 2029. Either option would apply to all companies that produce, distribute, and supply energy products.
Energy firms face protests and profit questions
Leading energy groups, including state-controlled Eni, announced fuel price caps last month. The move was widely seen as an effort to head off a windfall tax. Fuel prices remain high, however.
On 23 October, Eni reported that its third-quarter net profit more than doubled from a year earlier. The company plans a EUR 1.3 billion special dividend and a bigger share buyback programme.
The draft budget plan leaves room for tax rises
The Treasury’s Draft Budgetary Plan, published last week, does not mention new levies on energy firms. It does, however, show planned tax increases of EUR 10 billion to EUR 11 billion over the next three years. That equals 0.44% of national output. The plan also expects a similar sum from the financial sector through 2029.
