Italy’s government has quietly put a 50% increase on the table for the flat tax that has for years been used to lure high-net-worth individuals to the country, according to two officials briefed on the measure. The adjustment is being framed as part of a suite of fiscal steps to finance the 2026–2028 budget plan and sits alongside announced levies on banks and insurance companies.

The policy tweak marks a notable recalibration of Italy’s approach to attracting foreign residents who pay a fixed levy in exchange for simplified taxation. Officials say the change is driven by the need to broaden revenues and reduce reliance on borrowing as Rome prepares a multi-year budget. The proposal will be watched closely across Europe, where jurisdictions compete to attract capital, mobile labour and cultural patronage that can provide intangible economic and reputational benefits.

Rome’s timing comes against a backdrop of improving public finances. The head of the International Monetary Fund’s European department, Alfred Kammer, underlined that Italy has been outperforming on its deficit targets and is entering what he called a virtuous cycle. Yet he and other international finance officials stress that the gains are fragile without deeper structural reforms to lift potential growth. That advice lands as leaders in Rome attempt to balance fiscal consolidation with measures to sustain investment, employment and competitiveness.

Prime Minister Giorgia Meloni has sought to contain market and sectoral worries, indicating she does not expect recent tax announcements affecting banks and insurers to damage the economy or spark conflict with the financial sector. The government’s message is that the package is calibrated to shore up public finances while maintaining an environment attractive to business. Still, financial institutions and international investors will be evaluating the cumulative burden of sectoral levies and changes to taxpayer regimes when considering capital allocations and operations in Italy.

Beyond balance-sheet arithmetic, the flat tax adjustment carries diplomatic and cultural implications. High-net-worth migrants often bring art purchases, philanthropic foundations and business networks that fold into local ecosystems. A higher entry fee could slow these flows, with knock-on effects on luxury real estate markets, regional philanthropy, and international cultural ties that cities from Milan to Rome have long cultivated.

Domestically, the measures will test political consensus. The Meloni government must persuade European partners, domestic constituencies and market actors that the fiscal strategy supports sustainable growth rather than short-term revenue grabs. The IMF’s call for structural reform—ranging from labour markets to public administration—is a reminder that fiscal fine-tuning alone may not deliver higher living standards or faster GDP expansion.

Even as ministers negotiate the finer points of the budget, Italy’s public mood is also shaped by quotidian concerns outside economics. In sports, Juventus’s recent 2-0 loss at Como added to domestic unease after a string of draws, a reminder that politics and culture move in parallel across the country as leaders seek to steer Italy through a delicate fiscal and political moment.