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Renzi Promises Tax Cuts In Italy's Next Budget

by Ulrika Lomas, Tax-News.com, Brussels

12 September 2014


In a televised interview, Italian Prime Minister Matteo Renzi indicated that the Italian 2015 Budget Bill (legge di stabilità) will include at least a modicum of tax cuts, which are to be funded by public spending reductions.

Through a EUR20bn (USD25.8bn) decrease in spending (worth about three percent across all ministries), the Government will be able to provide some cuts to "taxes on employment," he said, but funds will also be needed to increase spending in specific areas, in particular in the education sector.

Renzi pointed out that the Government's hands are tied to a large extent by the gloomy forecast for Italy's economy, with stagnant growth predicted for 2014.

The EUR80 per month income tax deduction, which was introduced in May this year, will remain in the foreseeable future for the ten million individuals who are already receiving it, but he said he is, as yet, unable to offer the incentive to more taxpayers.

He confirmed that the 2015 Budget will see a further reduction in employment taxes. There are two options, he said: either decrease social security contributions or further cut the rate of regional tax on production (IRAP), building on a 10 percent reduction introduced earlier this year.

TAGS: individuals | tax | economics | fiscal policy | budget | corporation tax | education | social security | Italy | tax breaks | individual income tax

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