Mercoledì, 24 Ottobre 2018

Government to cut income tax, raise VAT


(ANSA) - Rome, October 10 - Premier Mario Monti said early
on Wednesday that his government will cut income tax in the two
lowest bands next year after a tense Cabinet meeting on budget
measures that ran late into the night.
But he added that a 2% increase in value added tax (IVA)
scheduled for July 2013 that the government had hoped to avoid
will be halved to 1% rather than scrapped completely.
So IVA will go up from 10% to 11% in the lower band and 21
to 22% in the top band.
Monti's stressed that the budget measures, contained in the
so-called Stability Law, did not amount to another austerity
package like the tax hikes and spending cuts his emergency
government passed last year to put Italy on course to balancing
its budget in structural terms next year.
But they still featured new cuts, including a reduction of
over one billion euros on health spending, that reportedly
caused Health Minister Renato Balduzzi to threaten to resign at
the cabinet meeting.
Nevertheless, Monti expressed satisfaction at the
income-tax cuts, which will primarily benefit lower earners,
saying they showed the policies of his administration of
non-political technocrats were working.
"Today we can see and feel that budget discipline pays and
it is beneficial," Monti told a press conference.
"We can allow some moderate relief (with moves such as) as
start in the reduction of income tax".
The income-tax rate will be cut to 22% from 23% for those
earning less than 15,000 euros per year, and to 26% from 27% for
salaries between 15,001 and 28,000 euros, while the top three
bands will remain unchanged.
Monti's austerity measures helped stop Italy following
Greece on the path towards a default on its massive national
debt but they also have deepened the recession the country
slipped into last year.

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