Italy Responds to France's Accusations of Unfair Tax Competition

Italy has strongly rejected claims by French Prime Minister François Bayrou that its tax system constitutes unfair competition designed to attract wealthy French citizens.

Foreign Minister Antonio Tajani expressed his astonishment at Bayrou’s remarks, describing them as “the result of a mistaken analysis.” Speaking to journalists on Monday, Tajani stated: “I was floored by Bayrou's comments, which are obviously the result of a mistaken analysis.”

Bayrou’s comments came during a television interview, where he voiced opposition to a flat tax for the wealthy, proposed by left-wing parties in France.

Bayrou warned that introducing such a flat tax could lead to an exodus of wealthy French citizens to other jurisdictions, particularly Italy, which he accused of engaging in “fiscal dumping.”

Italy’s tax system for ultra-high-net-worth residents allows them to pay a fixed annual tax of 200,000 euros ($230,000), irrespective of their global income, whereas France maintains a progressive tax system with additional brackets for properties valued over 1.3 million euros.

Bayrou is currently facing political turbulence. He failed to secure parliamentary support for budget measures he believes are essential to reduce France’s large public deficit.

On 8 September, Bayrou will face a confidence vote that he himself called. Should he lose, it is expected that both he and his government will be compelled to resign.

The proposed measures in France include:

• Freezing spending increases
• Reducing the number of public holidays enjoyed by citizens

Italy, meanwhile, continues to implement its own fiscal policies while managing its national deficit challenges.