Two thirds will be covered in extra deficit, so the government had to identify new revenues or spending savings of at least 8 billion
Today Monday 16 October at 9.30 am, at Palazzo Chigi, the Council of Ministers which will have to approve the maneuver, the budget planning document and the tax decree linked to the measure. At 10.30am Prime Minister Giorgia Meloni will hold a press conference in the multipurpose room of the Presidency of the Council of Ministers.
There are 15 billion for the confirmation of the cut in the tax wedge and an initial intervention on the Irpef, with the cancellation of the second rate; 5 billion for the renewal of public administration contracts; 3 billion for healthcare. The provisional total of the 2024 budget law reaches 23 billion, to which something must be added for non-deferrable measures and targeted interventions (such as for families with 3 children or more). Two thirds of the cost of the maneuver will be covered in extra deficit, so the government had to identify new revenues or spending savings of at least 8 billion.
Today, therefore, the cards will be revealed in the Council of Ministers called to launch the maneuver, the budget document that will have to be sent to Brussels, and two legislative decrees that launch the first module of the tax reform: a legislative decree on Irpef rates and the measures for businesses and a second provision on global tax and reshoring. Part of the resources necessary to confirm the entire announced package should come from international taxation, the amount of which will obviously depend on the law. Compared to recent years, in which the Covid emergency and the war in Ukraine, with the effects on energy and inflation, made it possible to bring budget laws to parliament that were double the current value, today the margin for action appears very limited.
For this reason, the Minister of Economy Giancarlo Giorgetti has used words such as ”prudence” or ”realism” on several occasions and made it clear that he will be ”against any type of amendment that will increase spending by covering it with greater revenues because this will not it’s more compliance, as they say in Brussels, with budget rules. Whoever wants to finance greater expenditure will have to cover it with less expenditure”. The government led by Giorgia Meloni has always put families with medium-low incomes at the forefront of the list of priorities, and has continued with the tool already available, the tax cut to increase paychecks.
Last year, with the first budget law signed by the centre-right executive, the reduction of the tax wedge was confirmed and increased, but it wants to be further strengthened by intervening on the tax for natural persons. In fact, the expected increase in allowances, of around 100 euros, would risk triggering the second rate, and therefore greater taxation, which would reduce the ‘treasure’ of 1,200 euros, on average, that is intended to be allocated to workers.
Wedge confirmation, up to 100 euros in the pay slip – Using the leverage of the extra-deficit of over 15 billion, the government will finance the cut in the tax wedge also for 2024 for 14 million workers. The measure, initiated by previous governments, and strengthened by Giorgia Meloni’s executive, provides for a reduction of 6 points in labor taxes for incomes up to 35 thousand euros and up to 7 points for those within 25 thousand euros, recognized in the pay slip up to 100 euros more.
Irpef simplification in legislative decree – Other fiscal measures should be contained in two legislative decrees which represent the first step of the tax reform. The first decree would merge the first two Irpef rates, bringing the minimum rate of 23% from incomes up to 15 thousand euros to those up to 28 thousand euros gross per year.
Global tax and reshoring – A second legislative decree should implement the agreement for the international global minimum tax to combat tax avoidance by multinationals, high tech in the lead (expected revenue of 2 billion) and a package of rules to attract investments with 5 years of tax incentives for companies that bring their activities back to Italy (reshoring).
Contrast birth rate – Measures to combat the birth rate will find space in the maneuver. The Minister of Economy Giancarlo Giorgetti spoke of measures to support families, with medium and low incomes, with more than two children. He is also thinking about measures to help mothers reconcile work and family.
Pa-Health – On the public contracts front, the contract is expected to be renewed. Hypotheses of an allocation of up to 5 billion are circulating in this regard. When starting the process for the renewal of public employment contracts for the three-year period 2022-2024, the government said that particular attention would be paid to medical and healthcare personnel.
Pensions – Due to limited resources, the pension package does not include any significant changes, probably only providing for the confirmation of Quota 103 and the social Ape for 2024.