Rete Imprese Italia, representing artisans, traders, the tourist sector and other services in Italy, has emphasized to stop penalizing consumer spending which is obvious in the Italian government’s proposed three-year tax reforms framework. According to them the government’s three-year tax reform framework will cause a shift in tax burdens away from the direct taxation of employees and employers, towards indirect and financial taxes. Though the personal income tax rates will decrease but there is no mention of an immediate increase to the rate of value-added tax (VAT) which is intended to rise gradually.
Rete Imprese Italia agrees to the future reductions in both individual and corporate tax rates, but they do not accept the increase in the VAT rate as it goes against their previous recommendations. According to their previously expressed opinion an increase to the rate of VAT would increase inflation which in turn affect the families on low to middle incomes, and encourage further VAT evasion, which is already estimated at around 2.5% of the country’s gross domestic product (GDP). They also forecasted that a shift in tax revenues from personal income tax to VAT, equivalent to 1% of GDP, would reduce GDP by some 0.8%.
