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Lower-Paid Italians Celebrate Tax Freedom A Day Earlier

by Ulrika Lomas, Tax-News.com, Brussels

14 May 2015


CGIA of Mestre, Italy's association of sole traders and small businesses, has calculated that on May 13, after 132 days, lower-income Italian employees paid all of their taxes and contributions for the 2015 tax year – one day earlier than last year.

CGIA's calculations only cover those who earn an annual salary of up to EUR24,000 (USD27,200) and therefore receive the existing income tax bonus. The others earning more will have to wait until June 23 – after 173 days of work.

The association admitted that the result of its estimates (based on a typical worker with a wife and one dependent child) are theoretical, but pointed out that it showed "the heavy tax burden that weighs on employees' earnings."

The bringing forward by one day this year of "Tax Freedom Day" for lower-paid workers is due to a change in timings for the EUR80 monthly income tax bonus and a marginal fall in the excise duty on fuel.

The association said taxpayers face the prospect of ever-higher taxes if the Government is forced to hike value-added tax or excise duty rates to shore up its finances. Italy is still awaiting European Union approval for the proposed extension of the VAT reverse charge mechanism to real estate and construction services, and to the retail sector, which could reduce the impact on Italian finances of VAT fraud.

CGIA's General Secretary Giuseppe Bortolossi said the best way to reduce the tax burden would be through a reduction in "unproductive public spending," such as by reducing municipal and regional authorities' remit.

TAGS: individuals | compliance | tax | small business | business | value added tax (VAT) | tax compliance | property tax | employees | excise duty | tax rates | Italy | retail | individual income tax | Europe | Tax

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