The Italian Almanac

Robin Hood

Robin Hood Tax

The Italian government will move ahead with plans to impose a so-called 'Robin Hood' tax on windfall profits made by oil companies during the current surge in fuel prices, Economy Minister Giulio Tremonti said. The measure will be part of the government's three-year economic plan set to be approved by the cabinet, he added.

The proposed 'Robin Hood' tax was criticised by the international Fitch ratings agency which said the measure could undermine the oil sector's investment strategy and put pressure on cash flow ''With the proposed tax, the (Italian) government hopes to restore household purchasing power by redistributing a levy on what it considers 'profit rich' energy companies that benefited from a high oil price environment over the past 12 months in favour of end consumers suffering from rising fuel prices,'' Fitch said. However, the agency observed, ''the effectiveness of these types of measures is often curbed by energy companies' efforts to pass-through additional tax charges to end-users.

When asked what could be done to avoid oil companies passing the tax down to the consumer, the minister replied: ''Just let them try''. ''This is a wonderful tax and produces a revenue aimed at reducing tax pressure'' and thus boosts family purchasing power, the minister observed. ''Fiscal-suation has already produced positive results on mortgages and there are political tools which can work in unison with fiscal-suation,'' Tremonti said.