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ITALIAN ECONOMY

ECONOMY

Italy’s high tax ‘burden’ stalls economic rebound

Italy’s tax system has become increasingly costly and inefficient since the economic crisis, with the burden falling on workers and business owners, a new study has found.

Italy's high tax 'burden' stalls economic rebound
The government should be focusing on spending cuts, not increasing taxes, the report said. Taxes photo: Shutterstock

Italy’s response to the economic crisis has put a heavy financial burden on workers, when the government should instead be focusing on cutting public spending, a report by research centre ImpresaLavoro has found. 

The Italian system is more costly and inefficient than those of four other countries studied – France, Germany, Spain and the UK – with employment tax in Italy being highest.

While the situation is now improving for the self-employed and small business owners in the UK, for example, taxes in Italy has increased over the past year.

“The burden of the fiscal system contributes to the stagnation of the country in various ways: it reduces competition, wastes time and resources in bureaucratic procedures, and ultimately reduces incentives to produce, work and save,” Massimo Blasoni, ImpresaLavoro president said.

“It remains a priority to reform the fiscal system, making the tax system less complex, moving employment and business taxes to consumers, and reducing the fiscal pressure by at the same time cutting spending,” he said.

According to a World Bank Doing Business 2014 report, Italy ranked 138th for the ease of paying taxes. The UK came in 14th, followed by France (52nd), Spain (67th) and Germany in 89th place.

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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