Meloni's government approves Italy's budget for 2027, with higher taxes for banks and priority given to families and defense

The Italian government led by Giorgia Meloni approved the draft 2027 budget on Wednesday, worth €26 billion, ahead of parliamentary elections scheduled for next year. The plan provides tax cuts for the middle class and self-employed workers, as well as additional funding for public healthcare.

Funding will come partly from higher taxes on banks, insurance companies, energy firms and the gambling industry. The financial sector is expected to contribute more than €5 billion. The corporate tax rate for banks will rise from 27.5% to 30.5%, while the rate for insurers will increase from 24% to 27%.

The public deficit is estimated at 3.4% of GDP in 2027, above the European 3% threshold, compared with 2.9% in 2026. Approximately half of the measures will be financed through a European fiscal flexibility clause intended for investment in defense and the green transition.

For taxpayers, the 33% rate will apply to incomes of up to €55,000, while self-employed workers will benefit from a 15% rate on incomes of up to €100,000. The budget also maintains the reduction in vehicle tax for most small and medium-sized cars.