So-called Superbonus 110 program for climate-friendly renovations threatens public finances, officials say
The Italian government has scrapped a climate-friendly tax credit scheme, saying it cost more than 110 billion euros ($117 billion) and led to widespread fraud. According to Finance Minister Giancarlo Giorgetti, the “Reckless policy” was a threat to public finances.
“We have decided to stop the effects of a perverse policy that has benefited a few citizens but imposed on each of us from the cradle a burden of €2,000 ($2,132) per head,” Giorgetti told reporters Thursday.
The so-called Superbonus 110 initiative, which was one of many programs aimed at reducing the environmental impact of properties, entitled homeowners to a tax credit of up to 110% on the cost of renovating their accommodation. Introduced after the end of the Covid-19 closures, the program has led to an increase in home renovations, boosting Italy’s economic activity.
However, the initiative was criticized by former Prime Minister Mario Draghi, who called it a “a system without control” after it was revealed that $4.6 billion in fraud had been linked to the scheme.
The law ending the tax credit program specified that the construction work already started would continue.
Meanwhile, former Italian Prime Minister Giuseppe Conte, whose government introduced the Superbonus system in 2020, warned the move would deal “a fatal blow” to the construction sector. “We are jeopardizing 25,000 businesses and 130,000 jobs” he claimed.
The president of the national construction association ANCE, Federica Brancaccio, echoed the warning, adding that if the government stopped tax credits without offering a structural solution, then “Thousands of businesses will be permanently without cash and construction sites will come to a complete halt, with serious consequences for families.”
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