Italian Government Considers Tax Cuts To Counter Slowdown

by Ulrika Lomas, Tax-News.com, Brussels

12 October 2001

The Italian Economy Minister, Giulio Tremonti announced this week that the government is considering following President George Bush's lead and implementing tax cuts in order to stimulate spending and counter the slowdown in the Italian economy.

Speaking at a press conference held to showcase the government's economic measures package, approved Wednesday, Mr Tremonti simply said: 'It's an option we're examining'. Tax cuts were not included in the government's draft 2002 budget, despite having been promised during the election campaign. Prime Minister Silvio Berlusconi cited the sharp slowdown in the economy and strict EU rules on budget deficits as the principal reasons. However, Mr Tremonti indicated on Wednesday that there was still time to implement cuts if necessary.

The main points of the economic package already approved by the Italian parliament, include tax breaks for companies that reinvest their profits, the abolition of hereditary taxes and gift taxes, and measures to encourage companies committing tax evasion and operating in the underground economy to come out into the open.

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