Italy’s new Prime Minister, has provided extra detail on cuts to reduce the tax burden in Italy which that are intended to provide an immediate boost to the country’s economy.
Resources totaling EUR10bn (USD13.9bn) have been allocated by the Government to allow for an increase, from May 1, 2014, to individual income tax (IRPEF) deductions for employees earning less than EUR25,000. This would add around EUR1, 000 to the net wages of around 10m taxpayers, and would be funded primarily through cuts to government spending.
With regard to reducing the tax burden on businesses, which would also be in place from May 1, 2014, the Government has decided to lower the regional tax on production (IRAP) by 10 percent, at a cost of EUR2.6bn. The decrease in tax payable by businesses will be financed by a hike in the rate of tax payable on financial income, from 20 percent to 26 percent. The tax rate on government debt will remain at 12.5 percent.
