By Giuseppe Fonte and Valentina Za
ROME (Reuters) -Italy expects to raise about 5.4 billion euros ($5.82 billion) over the next three years from banks and insurers through a package of measures envisaged in Rome's 2025 budget, a government document seen by Reuters showed on Wednesday.
The Treasury had previously said that the financial sector would contribute 3.5 billion to Italy's budget.
Italian banks will temporarily face higher taxes on profits as the government intends to force lenders to spread tax deductions stemming from past losses for up to four years.
The move, including other minor tax measures, is expected to result in a contribution from banks to Italy's strained state finances worth 3.6 billion euros in the 2025-2027 period, the document said.
Talk of a new levy weighing on the financial sector had swirled for weeks and weighed on lenders' shares in the absence of clarity from the government. Economy Minister Giancarlo Giorgetti has said a contribution from banks "shouldn't be considered blasphemous."
Under the budget, banks will have to use 2025 tax credits, known as deferred tax assets or DTAs, to lower their taxes over four years between 2026 and 2029, while the use of DTAs related to 2026 will be spread over the following three years.
Italy's largest banks include Intesa Sanpaolo (OTC:ISNPY), UniCredit, Banco BPM and state-owned Monte dei Paschi di Siena.
The measure is particularly relevant for MPS, which has significant DTAs on its balance after years of steep losses and had started reaping benefits now that it's once again profitable.
Italy's Treasury needs to cede control of MPS by the end of this year to meet re-privatisation terms agreed with the European Union at the time of a costly 2017 bailout, people have previously said.
The government also expects to collect 1.75 billion euros over the next three years from insurers by changing in the budget the payment terms of stamp duties for some insurance policies.
As things stand, the stamp duty gets calculated every year but gets paid by investors when they cash in on the policies.
The government however is asking insurers to pay upfront and then get it back at the end of the contract from their clients starting from next year.
Moreover, insurers must pay by June 30, 2025 half of stamp duties owed up to 2024 on existing contracts. Another 20% is due by June 30, 2026. A further 20% by mid-2027 and the remaining 10% by mid-2028.
Italy last year shocked markets by imposing a 40% tax on banks' windfall profits, only to backtrack by limiting the scope of the levy and giving lenders an opt-out clause which meant that in the end it raised zero for state coffers.
($1 = 0.9286 euros)