* Italy may raise tax on bond coupons to 20 pct from 12.5
* Tax on capital gains below EU average -PM's chief of staff
* Higher bonds tax could yield 400 mln euros in revenue
* Italy's DMO head calls for caution on tax increase
(Recasts, adds comments by Renzi, Italy's DMO head, Reuters
calculation on revenue)
By Lisa Jucca
MILAN, Feb 24 Italy may increase taxes on
coupons pocketed by Italian savers on government debt, new Prime
Minister Matteo Renzi's chief of staff Graziano Delrio said in a
Renzi confirmed on Monday his government would consider
raising taxes on gains from financial investments as a way of
funding a labour reform package, but gave no details.
"Taxing (financial) earnings to get money for the labour
reform is an issue that will be studied," Renzi told reporters
in the Senate, where a confidence vote on his new government is
to be held later in the day.
Coupons on Italy's huge stock of government bonds and bills
- popular with domestic savers and foreign financial investors -
are currently taxed at 12.5 percent.
The rate could be increased to the 20 percent capital gains
tax Italy levies on other financial instruments, according to
Italian newspaper La Stampa.
That would hit only Italian retail investors and would bring
in around 400 million euros for Italy's state coffers, according
to Reuters calculations based on an average coupon of 2.83
percent on outstanding government bonds.
"We will consider whether we should rework the taxes on
capital gains from financial investments, which at the moment
are not in line with the European average of 25 percent," Delrio
told the Italian television programme 'In Mezz'Ora' on Sunday.
Delrio specifically raised the prospect of raising the tax
on BOTs - a term that refers to government T-bills but is often
used as shorthand for government debt in general.
While details on the new government strategy are sketchy,
Italy's head of Debt Management Office suggested caution on the
idea of hitting savers who invest in the country's debt.
"The impact on revenue could be small, but I don't know
about the effect on demand," Maria Cannata said at a business
conference in Rome. "A bit of caution would not be a bad thing."
She said, however, she was not at all concerned about this
week's debt auctions.
Starting on Tuesday, the Treasury will tap the market for
three days in a row, a first test of investor sentiment towards
a potential hike in tax.
Renzi has said he will address the high taxes and high
labour costs that have stifled the competitive edge of a country
slowly emerging from its longest recession in 60 years.
In 2014 as whole, the Treasury is expected to sell around
470 billion euros of new bonds and bills, approximately the same
amount as last year.
Italy-based investors, excluding banks and other financial
institutions, held 183 billion euros in Italian bonds in
November, central bank data showed this month - some 10 percent
of the 1.755 trillion euros outstanding in bonds and bills.
(Additional reporting by Stefano Bernabei, Giuseppe Fonte,
Alberto Sisto in Rome; writing by Francesca Landini; Editing by
John Stonestreet and Alistair Lyon)