Italian Government to cut down taxes by around EUR 7,000 million in 2022

EU post-COVID recuperation finances to stimulate consumption & reduce tax burdens

Italian Government to cut down taxes by around EUR 7,000 million in 2022

Italian Government to cut down taxes by around EUR 7,000 million in 2022

The Italian government has authenticated the budget plan set for 2022. The budget document, which has already been submitted to the European Commission, is inclusive of a recession in taxes, a surge in funds dedicated to Health, and boosting resources to maintain the prices of energy.

Italian Government’s budget plan drafts striking tax decisions

The budget plan must be amended and authenticated by the Parliament. It is said to facilitate a recession of the tax burden in Italy; the estimate is around EUR 7,000 million (USD 8,150 million). The tax reform blueprint is set to be fully functional from 2022.

The most striking feature of the Italian Government budget plan is the tax section. This is because the Italian Government has already received the sanction of the European Union to receive approximately EUR 200,000 million (USD 232,830 million) of post-COVID recuperation finances for the next 5 years. Daniele Franco, the Italian Minister of Economy, and Mario Draghi, the Prime Minister of Italy & the former President of the European Central Bank, have indicated that the funds will allow useful stimulation of consumption to reduce tax burdens. The former president of the ECB declared that he would assume a tax reform similar to the one drafted by Denmark in 2008.

The Programmatic Budget Document works per the Budget Law for 2022. The latter is estimated to be drafted in the next few days. The Budget Law considers and envisions an upward future macroeconomic scenario. Budgets, stated the Italian Executive, maintain the sole purpose of underpinning the economy in the post-pandemic phase. He said that budgets reinforce the growth curve in the medium term, thus minimizing the tax burden on firms and citizens.

Additionally, the Italian Government has reduced the tax charged on female hygiene products from 22% to 10%. This proposal has witnessed a coalition agreement of the Spanish Government. The Italian Government has also established a delay in taxing plastic and sugar and has facilitated the distribution of resources to check energy prices.

Draghi has declared to lower the taxes although the country possesses one of the heftiest public debts in the EU. According to the scheme sent to Brussels, the Italian debt stands at 153.5% of gross domestic product (GDP) in 2021 and will slip to 149.4% next year. The COVID19 pandemic has also increased the public deficit above the 3% of the country’s GDP established by European prosecutors.

The Executive predicts the GDP of Italy to surge by 6% in 2021, concerning the 4.5% estimated in April 2021. In 2022, the Executive predicts GDP to rise by 4.7%.

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