MILAN (Reuters) - Italy may increase taxes on gains from investments in government debt, new Prime Minister Matteo Renzi's chief of staff Graziano Delrio said in a television interview on Sunday.
Renzi, who at 39 is Italy's youngest prime minister, faces his first test before a fractious national parliament later on Monday when he goes before the Senate to seek to win a confidence vote on ambitious reform plans.
"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'.
In the interview, Delrio specifically raised the prospect of raising the tax on BOTs - a term that refers to government T-bills but is often used in Italy as shorthand for government debt in general.
Gains 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.
If the rate was increased to the 20 percent capital gains tax Italy levies on other financial instruments, analysts have estimated Rome would get around 1 billion euros in additional tax income from government bonds held by retail investors.
Renzi's press office said in a statement that the government was not planning any new taxes, but was aiming "to cut the overall tax burden through a rearrangement of capital gains tax and income tax."
The new premier 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.
Italian newspaper La Stampa said on Monday that the government was looking to increase the tax levied on capital gains from government bonds to 20 percent.
Another option was to increase to 22-23 percent the gains tax on all financial instruments, with some exceptions for investments by pension funds, it said.
Renzi may shed more light on his government's plans when he speaks to the Senate at 1300 GMT.
Italy holds a string of debt auctions this week, starting on Tuesday, which will provide a first test of investor sentiment towards a potential hike in capital gains tax.
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.
(Reporting by Lisa Jucca; Editing by Catherine Evans, John Stonestreet)