Italy will no longer hold the same allure for Europe’s super-rich after it doubled the rate of its flat tax on the income of new foreign residents.

In 2017, an attractive tax rate was introduced under a centre-Left government as an incentive to draw in wealthy individuals looking to escape higher taxation elsewhere in Europe.

Ministers at the time hoped the influx would benefit Italy’s economy but the move has also been criticised, especially in Milan, where wealthy foreigners are perceived to have driven up property prices and the cost of living.

Giuseppe Sala, Milan’s mayor, said last year that while tax incentives attracted new wealth to the city, more needed to be done to address inequality.

On Wednesday, Giorgia Meloni’s cabinet yielded to the opponents and approved a rise in the annual flat tax on overseas income for new residents from the €100,000 (£86,000) a year payment to €200,000.

The measure has come too late to damage the income of the scheme’s most high-profile beneficiary, footballer Cristiano Ronaldo, who moved his tax residence to Italy between 2018 and 2021 when he played for Juventus.

The Portuguese superstar now plays his club football in Saudi Arabia.

Giancarlo Giorgetti, the finance minister, said the government was against the idea of creating competition to offer “fiscal favours” to the rich.

“We are against unleashing a competition among countries for favourable tax situations for people and businesses, because countries like Italy are bound to lose,” he said.

The prime minister has been looking for ways to raise more revenue amid a squeeze on Italy’s public finances as she prepares for her upcoming autumn budget.

The government’s latest move is expected to make a small contribution to bolstering public finances but do little to mollify European Union concerns about excessive spending.

Rome is struggling to rein in a budget deficit, which reached 7.4 per cent of gross domestic product last year — well above the 3 per cent of GDP targets for EU member states.

Mr Giorgetti said 1,186 taxpayers had taken advantage of the flat tax since its introduction in 2017 but it was difficult to evaluate how much had been reinvested in Italy.

Italy’s audit court has estimated that £218 million in taxes were paid under the scheme between 2018 and 2022.