Italy to Cut Taxes
May 1, 2013 Taxation in Italy
ROME – The new prime minister of Italy has announced the government’s plan to introduce series of tax cuts.
Only shortly after winning the final vote of confidence in the parliament of Italy on April 30th, the newly elected Prime Minister of Italy Enrico Letta indicated that the government is now looking at halting a planned hike to VAT, and is weighing up the feasibility of permanently dropping a tax currently imposed tax on residential properties.
According to the prime minister, the housing tax currently imposed in Italy will be temporarily dropped for the current year, while the government conducts a review of the country’s tax system.
The coalition partner of the currently ruling Democratic Party, the People of Freedom, has already been campaigning strongly to abolish the housing tax entirely, a move which would cost the government approximately EUR 8 billion per year, but the new prime minister gave no indication if dropping the tax altogether is a realistic possibility at this point.
Enrico Letta also indicated that the government will not go forward with a 1 percent hike to VAT, which was scheduled to take place in June, and which, if implemented, would have raised the VAT rate to 22 percent.
The prime minister also said that the government is now looking at introducing new tax cuts and incentives for small and medium sized businesses operating in Italy, as part of a fresh effort to encourage more economic activity and to restart the country’s economic growth.
Photo by Enrico Letta