Italian Prime Minister Silvio Berlusconi is still hoping to cut taxes by €6 billion next year, despite the omission of tax cuts from the 2005 budget approved by the cabinet this week.
“We are proceeding towards (tax cuts) worth 0.5% of GDP. Six billion in 2005, and the same in 2006," Berlusconi told reporters.
Under Berlusconi's plan, three tax brackets would be created from the five that exist currently. The maximum rate will be cut to 39% from 45%, with a minimum rate of 23% and middle bracket of 33%.
However, much of his original plan has had to be scaled back due to pressure from within the governing coalition, and from beyond Italy’s borders in the form of the European Commission.
The cabinet has approved a draft budget which included €24 billion worth of measures to keep Italy's deficit within the European Union's 3% of gross domestic product limit - the largest budget adjustment Berlusconi has put forward since taking office in 2001.
.Tags: Italy | Italy
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