Covid, comes a tax against Big Pharma? What is the excess profit tax

Covid, comes a tax against Big Pharma? What is the excess profit tax
Covid, comes a tax against Big Pharma? What is the excess profit tax
Uil has asked the government for one profit tax for large companies that have benefited from the pandemic of Covid. The trade union acronym, with a study conducted in collaboration with EURES, has shown that corporate taxation in our country is in line with the European and international average, with a corporate income rate of 27.8% a compared to 26.5% of that recorded in the EU. However, it is several percentage points below the more industrialized nations such as France, where the tax rate is 32%, and Germany, where it is 29.9%. The research underlines that not all companies have had the same “repercussions of the pandemic”, with some sectors that have instead drawn large advantages.

Covid, towards a tax for Big Pharma: who pays the most in Italy

In Italy, companies pay approximately 139 billions euro of taxes, including VAT, but with important differences based on size. Small businesses that make less than 500,000 euros in turnover contribute 18% to tax revenues, while generating only 7.7% of total turnover. Large companies, with over 25 million in revenues, despite having a turnover of 60% of the total, contribute 47.6% to tax revenues.

For Uil it is necessary to start a discussion to evaluate the real opportunity to introduce one increase tax to the extra profits made by companies during the health emergency, with an extraordinary tax levy on a share of excess profits.

Covid, what is the excess profit tax and why it has been revived now

The excess profit tax it would be set up only for companies, particularly multinationals, which have benefited economically from the pandemic. According to Pierpaolo Bombardieri, UIL secretary general, this would be not only a question of “social justice”, but also of the “effectiveness of the economic system”.

Excess profit taxation is nothing new. It was introduced as early as 1917 in the United States of America, and among its authors it sees the name of John Maynard Keynes, father of the most important macroeconomic theories. The union leader pointed out that the coronavirus has widened inequalities, not unlike a world war.

On the one hand, many production companies have “sunk” into a crisis from which it will be very difficult to get out, while others have drawn economic benefits, even significant ones, from the health emergency, as highlighted by the study by Uil and Eures.

It is about the Big Pharma, the big pharmaceutical companies, but not only. Among the companies that would have earned more with Covid, explained Pierpaolo Bombardieri, there are also some companies operating in the logistics and gods services. And for this it would be right to provide for an additional tax on the surplus of profits. The proceeds of that tax revenue could be made available as investments for the relaunch of the economy and production for those categories that have instead been most affected by the anti-contagion measures.

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