Italy govt approves 2023 budget with 35 bln euros to lift economy

  • The budget received more than 21 billion euros to settle energy bills
  • Additional income tax for energy firms at 35%
  • It includes amnesty on tax debts, cut to retirement age
  • It also starts a bridge project connecting Sicily to the mainland

ROME, Nov 22 (Reuters) – Italy’s new right-wing government signed off on the first budget on Tuesday, a package focused on curbing high-risk debt and tax cuts from next year for salaried workers and the self-employed.

Prime Minister Giorgia Meloni hopes the spending boost will speed up the recovery of the euro zone’s third-largest economy, which the Treasury has predicted will contract between the current quarter and the first quarter of next year.

The budget was approved at around half past midnight (23:30 GMT), Meloni’s office said, after a three-hour cabinet meeting. It now goes to parliament, which should pass by the end of the year.

The measures total almost 35 billion dollars ($35.84 billion), with Rome planning to finance about 60% of the package by driving next year’s budget deficit to 4.5% of gross domestic product (GDP) from 3.4 % of the forecast for September.

Also Read :  EU Seeks Power to Set Emergency Cap on Gas Prices

Other funding sources include windfall tax increases on energy companies that have benefited from rising oil and gas prices, the Treasury said in a statement.

With a tax rate ranging from 25% to 35% until July 2023 and calculated on revenues instead of profits, the new tax follows the framework proposed by the European Commission and replaces the scheme that has caused criticism and refusal to pay from many energy firms.

The budget tightens the terms of the “citizen” poverty alleviation program for the unemployed, which the rights group says is discouraging people from looking for work.

Next year, people of working age will be able to receive the allowance for eight months, before the complete abolition of the citizen’s income from 1 January 2024.

The budget allocates over 21 billion euros next year to help firms and households pay their electricity and gas bills.

Also Read :  The mountain CAN’s archbishop Okoh must climb | The Guardian Nigeria News

To increase pay packets, it sets aside around 4.2 billion euros to reduce the “tax wedge” – the difference between what an employer pays and what a worker takes home – and benefits for low-paid workers.

This document introduces financial incentives aimed at encouraging the employment of open contracts for women under the age of 36, fixed-term workers and salaried citizens.

SLOWING THE ECONOMY

With inflation, the Italian economy is expected to grow by 0.6% next year after a figure of 3.7% this year, according to the latest estimates of the Treasury Office, which is more than those of previous independent analysts.

Implementing one of Meloni’s main financial proposals, the budget increases the 15% single tax rate for self-employed people to an annual salary of 85,000 euros, compared to the current ceiling of 65,000 euros.

With the idea of ​​building a huge bridge connecting Sicily with the rest of Italy, a long-term pet project of the Italian right, to oversee the project the bill restarts a dedicated government-backed company that has been dissolved.

Also Read :  The Time to Buy the Dip Is Fast Approaching — for One Country

One of the most controversial items in the budget is the amnesty for tax payments up to 1,000 euros from before 2016. Critics say such exemptions, which are unusual in Italy, encourage people not to pay taxes.

The budget also conditionally lowers the retirement age next year, stating that Italians will be able to retire from age 62 if they pay at least 41 years of contributions.

Under the rule set this year by Meloni’s predecessor Mario Draghi, people are given a state pension at age 64 if they have worked for 38 years.

With an eye on the cost of living, the budget lowers the sales VAT on some essential consumer goods such as baby care products and feminine hygiene tampons to 5% from 10%.

($1 = 0.9766 euro)

Edited by Keith Weir

Our standards: The Thomson Reuters Trust Principles.

Source

Leave a Reply

Your email address will not be published.