Tax reform today in the CDM: what changes

Three key principles: reduction of the tax burden, new relationship between the state and the taxpayer, the fight against tax evasion

The enabling law on tax reform lands today in the Council of Ministers. According to Prime Minister Giorgia Meloni, there are three cardinal principles: reduction of the tax burden; a new relationship between the State and the taxpayer that is no longer vexatious but equal; effective fight against tax evasion. The “backbone” of the reform “will be the revision of the personal income tax system, with a progressive reduction in the number of personal income tax rates and the goal of a lower tax burden for all taxpayers, with particular attention to medium-low incomes and taking into account the composition of the family nucleus”, he said yesterday speaking in the House during question time.

Another piece of the tax delegation will concern the “overall reform of IRES. The global minimum tax will enter into force on 1 January 2024, the minimum global tax for multinationals with an effective rate of 15% which requires a revision of IRES to not jeopardize the competitiveness of our companies on a global scale. With the tax delegation, the government intends to reduce the IRES rate and intends to do so on non-distributed profits that are used in qualified investments and in new permanent hires”. Prime Minister Giorgia Meloni explained this in the Chamber, answering a question from Forza Italia on the tax issue during question time in the Chamber. “The message – summarizes Meloni – is always: the more you hire, the less taxes you pay to the state”.

From the reduction of the income tax brackets, to the abolition of the Irap and the revision of the Ires, the reform ranges from taxes to assessment, from collection to litigation. The bill will indicate the measures then it will be up to the implementing decrees to arrange the executive rules in detail. These are some of the possible expected changes:

IRPEF, ONLY THREE SCAGLIONI. The personal income tax brackets are preparing to go from four to three, with the relative adjustment of the rates. Among the hypotheses under study there would be that of merging the central brackets and providing for a scheme with a rate of 23% for incomes up to 15 thousand euros, 27% for incomes from 15 thousand euros to 50 thousand euros and 43% for incomes over 50 thousand EUR.

CUT TAX EXPENDITURES. The resources for the revision of the Irpef would also be found through a pruning of the more than 600 tax expeditures, i.e. the tax deductions and deductions which today cost the State around 156 billion.

FIGHT EVASION. The reform aims to review the assessment system to strengthen the fight against tax evasion, currently estimated at a value that fluctuates between 85 and 100 billion a year.

IRES REVIEW. The bill should also provide for the revision of IRES, the corporate income tax. The basic rate, according to the working hypotheses, would remain at 24% but could drop to up to 15% for companies that allocate profits to investments in innovation or to the hiring of former recipients of Rdc, women or over 50s.

ABOLITION OF IRAP. The bill should also include the project to abolish Irap, the regional tax on productive activities.

SIMPLIFICATION OF PAYMENTS. Among the other simplification measures, the reform could also include the quarterly arrangement of payments, aligning them with VAT payments, with the exception of the month of December.

CHECKS. With the delegation, the aim is to simplify the relations of companies with the tax authorities. For the smaller ones, a cross-use of the databases available on billing and VAT would be used. On the basis of that knowledge, where necessary, two-year preventive agreements would be launched on a large scale, with more intrusive checks for companies that do not accept. Cooperative compliance could instead be extended for larger companies.

Meanwhile, after the confrontation with the unions, they were yesterday the representatives of the trade associations and professional bodies were received at Palazzo Chigi, who expressed “a positive opinion” for “a comprehensive and complete reform”, providing “important and concrete contributions to the debate”. On behalf of the Government, the Economy Minister, Giancarlo Giorgetti, the Deputy Minister, Maurizio Leo, and the Undersecretary of State to the Prime Minister, Alfredo Mantovano, took part, bringing greetings from the Prime Minister, Giorgia Meloni.

The Government, reads a note from Palazzo Chigi, reiterated its willingness to discuss, which will continue throughout the process of approving the reform, confirming its willingness to set tables on each state of progress of the works. The next steps envisage the examination of the enabling bill tomorrow in the Council of Ministers and, once approved, the subsequent start of the parliamentary process. The delegated decrees, which will contain the implementation discipline of the principles expressed in the Delegation, will be adopted within 24 months from the date of entry into force of the Delegated Law.