The Italian government on Wednesday gave the green light to a decree that would double the so-called flat tax on income earned abroad by wealthy individuals who move their tax residence to the country, to 200,000 euros (218,220 dollars) per year.

The incentive was introduced in 2017 under a centre-left government and was intended to attract rich people to Italy in the hope that this would benefit the economy.

However, Economy Minister Giancarlo Giorgetti told reporters that Italy was now against the idea of ​​countries competing with each other for “tax breaks” for the wealthy.

The government’s decision could also go a long way toward strengthening Rome’s public finances as Prime Minister Giorgia Meloni prepares a 2025 budget aimed at reducing the country’s large fiscal gap.

A prominent beneficiary of the system was Portuguese football star Cristiano Ronaldo, who moved his tax residence to Italy between 2018 and 2021 when he played for Juventus.

According to Giorgetti, around 1,186 taxpayers benefited from the flat tax scheme, while the Italian Court of Auditors estimated that between 2018 and 2022, 254 million euros in taxes were paid under this scheme.

The EU criticized the measure as unfair and damaging to public finances.

“The tax regimes for high-net-worth individuals in Greece and Italy are the most damaging because they grant large tax exemptions to extremely wealthy individuals,” the Union’s tax observatory said in its Global Tax Evasion Report this year.

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