Italy’s new bank tax should count as cost, ABI banking lobby

MILAN (Reuters) – Italian banks should be able to deduct from their overall tax bill the one-off tax on income deriving from higher interest rates which the government plans to introduce, industry lobby ABI said on Tuesday.

In comments prepared for a parliamentary hearing, ABI also said that the impact of lenders’ government bond holdings on their income and capital should also be excluded from the tax.

ABI warned the tax risked violating principles set by Italy’s constitutional law. It added the sector faced challenges such as a rising cost of funding and a possible increase in unpaid loans driven by the higher rates.

(Reporting by Valentina Za and Giuseppe Fonte; editign Federico Maccioni)