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As already mentioned Sect. 1.2, Italy is moving from a system based on public expenditure towards the full recovery of costs through tariffs; at the same time, the law sets the basis for establishing an economic regulation of prices aimed at guaranteeing cost recovery, efficiency and affordability. The structure of the water service value chain is described in Fig. 4.2, where we can identify four levels (resource ownership, bulk supply, retail supply and final demand); only the first and the last one are always present, depending on national and regional specificities. The final cost paid by the user includes fees and taxes paid to the resource owner (normally the state), tariffs and prices paid to retail and bulk supply operators and finally direct costs that are borne by the user itself (e.g. for
installing and operating its own water abstraction or treatment systems). Abstraction and discharge fees are considered as environmental taxes and thus set by competent authorities; their level is intended as a compensation for administrative costs related to the licensing and control process. In the economy of water services they play only a negligible role.
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