Published by Global Banking & Finance Review®
Posted on January 14, 2025
2 min readLast updated: January 27, 2026
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Italy's new tax incentives aim to boost domestic holdings of its public debt by offering discounts on government bond income from the ISEE wealth measure.
ROME (Reuters) - Italy adopted a decree on Tuesday to issue effective tax incentives for the purchase of government bonds, part of Rome's efforts to boost domestic holdings of its almost 3 trillion euro ($3.08 trillion) public debt.
Announced in late 2023 and widely criticised for benefiting the well-off rather than the poor, the plan will allow income from government bonds to be discounted from the ISEE, a measure of wealth that determines access to welfare benefits under government means testing.
Deductions are capped at 50,000 euros in sovereign bonds and investment products for small savers whose repayment is guaranteed by the state, Prime Minister Giorgia Meloni's office said in a statement.
Italy already taxes income from government bonds at a lower 12.5% rate than the 26% applied to other financial investments.
Italian debt, the euro zone's second highest after Greece in relation to gross domestic product (GDP), is targeted by the Treasury at 136.9% this year and 137.8% in 2026, before marginally declining to 137.5% in 2027.
Italy believes that more domestic ownership of Rome's debt, whose sustainability is seen as crucial to the euro zone's survival, could increase its resilience to shocks as small savers are less likely to panic in a crisis.
($1 = 0.9753 euros)
(Reporting by Giuseppe Fonte; editing by Mark Heinrich)
The article discusses Italy's new tax incentives for domestic government bond buyers to increase public debt holdings.
Income from government bonds can be discounted from the ISEE, with deductions capped at 50,000 euros for small savers.
Italy aims to increase domestic ownership of its debt to enhance resilience against economic shocks.
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