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Italy's evergreen centre-right leader Silvio Berlusconi, is set to return for his third stint as the country's Prime Minister following his recent election victory, and has promised to reduce Italy's tax burden, starting with property tax.
After emerging victorious from general elections on 13th and 14th April - and with a better-than-expected parliamentary majority - 71-year old Berlusconi announced that the first cabinet meeting of his new government will discuss the removal of the property-based tax known as ICI, which is levied against an individual's principle residence, and is used to fund local government. This is expected to cost EUR2bn.
Berlusconi has also pledged to axe other taxes, including an overtime levy, a tax on annual bonuses, and a tax on car ownership, and, before his five year term is out, he wants the top rate of income tax reduced from 43% to 33%.
Ultimately, Berlusconi is targeting a reduction in the country's overall tax burden to less than 40% of gross domestic product from its current level of more than 43%.
However, with the Italian economy slowing, and his proposals coming with a hefty price tag, the Prime Minister may lack the resources to fully carry out his economic programme, despite his determination to cut state spending and keep the budget under control.
What's more, European Union Commissioner for Economic and Monetary Affairs Joaquin Almunia has reportedly warned the new Italian government that the EC will not hesitate to sanction Italy if it fails to keep its deficit in check.
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