Italian Government To Keep Promises On Tax

by Ulrika Lomas, Tax-News.com, Brussels

10 June 2002

Speaking following a meeting with the Italian Economy Minister Giulio Tremonti last week, union leader Adriano Musi revealed that the government is set to keep a pre-election pledge to reduce taxes.

'The government showed us three possible scenarios,' the deputy chief of the UIL, Italy's third-largest union with around 1.8 million members, revealed to reporters. He added that: 'The cuts must be compatible with economic growth given that there isn't an infinite amount of money.'

Following Prime Minister, Silvio Berlusconi's postponement of a controversial proposal to make it easier to fire certain types of newly hired workers (which led to the tragic death in March of labour adviser to the government, Marco Biagi, and to a full day strike in April), union leaders came back to the table to discuss the 2003 budget.

Given that Mr Berlusconi campaigned more than a year ago on the platform of lower taxes for all, a package of pro-business measures, and a pledge to boost the country's lowest pension payments, action on reducing taxes has become increasingly urgent, however.

According to Mr Musi, the Economy Minister revealed on Thursday that the government is planning to reduce income taxes by between 5 billion and 8 billion euros, with spending cuts envisaged to fund the tax reductions.

Total tax cuts of around 21 to 23 billion euros are planned by 2006, according to the union official.

Recommended