ROME: The Italian government approved a decree on Wednesday doubling to 200,000 euros ($218,220.00) per year a flat tax applied on income earned abroad by wealthy individuals who transfer their tax residence to the country.

The incentive, introduced in 2017 under a centre-left government, aimed to lure rich people to Italy in the hope that it would benefit the economy.

However, Economy Minister Giancarlo Giorgetti told reporters Italy was now against the idea of countries competing with each other to offer “fiscal favours” to the wealthy.

The government’s decision may also make a small contribution to bolstering Rome’ public finances as Prime Minister Giorgia Meloni prepares a 2025 budget aimed at narrowing the country’s wide fiscal gap.

The doubling of the flat tax will only apply to people signing up to the option in the future, the decree spells out. Those who have already moved their tax residency to Italy will continue to pay 100,000 euros per year.

One high profile beneficiary of the scheme was Portuguese soccer star Cristiano Ronaldo, who moved his tax residence to Italy between 2018 and 2021 when he played for Juventus.

Giorgetti said some 1,186 taxpayers had taken advantage of the flat tax, while Italy’s audit court has estimated that between 2018 and 2022 taxes paid under the scheme amounted to 254 million euros. The EU criticised the measure as unjust and detrimental to state accounts.