It is a maneuver that aims to help above all medium-low incomes, between new modulation of Irpef rates and confirmation of the cut in the tax wedge for 2024, the one launched today by the Council of Ministers. The budget law goes hand in hand with the first two implementing decrees of the fiscal delegation which launch, in addition to the reform of Irpef rates, a new IRES model to facilitate hiring and the global minimum tax for multinationals. In total the two measures are worth around 28 billion, 24 destined for the budget and the rest for the remodulation of the tax system. The coverage of the measures is obtained through 15.7 billion of budget deviations, 5 billion of cuts – in particular to the activities of ministers – 2.6 billion of remodulation of expenses, and an increase in excise duties on tobacco.
Among the most characteristic measures is support for birth rates and large families, with free nursery for second children and relief for companies that hire mothers with at least two children. Deductions also for those who hire young people on a permanent basis, residents in less developed regions and former recipients of citizenship income. Then there are funds for the renewal of PA contracts, starting from the safety and health sectors, and the confirmation of the energy social bonuses and the Social Card for food and fuel purchases. And the multi-year spending forecast of 12 billion to build the bridge over the strait. The Rai license fee credited to the energy bill decreases, going from 90 to 70 euros per year.
The Minister of Economy Giancarlo Giorgetti repeats his mantra: it is a maneuver that “confirms the serious prudent approach” in the approach to public finance, in which the extra-trade deficit is used to give “relief to medium-low incomes”. The head of the Treasury recalls that the “weight of the public debt” is being felt and that to raise the funds the MEF resorted to a “significant spending review” which led to “giving ministers slaps to help low-medium incomes”. The opposition rejects the maneuver just approved by the government: the secretary of the Democratic Party Elly Schlein speaks of a text “without vision which will not improve the lives of Italians”, the leader of the M5s Giuseppe Conte of a “harmful budget which does not provide anything against the high cost of living” , while Carlo Calenda of Azione judges the measure “populist and dangerous, the citizens will pay for it”.
The tax reform package and legislative decree allocate a total of around 28 billion euros for 2024. Below are all the measures launched by the Council of Ministers.
TAX
Around ten billion are intended for the renewal in 2024 of the tax-contribution wedge cut (7% for incomes up to 25 thousand euros, 6% for incomes up to 35 thousand euros). Another 4.3 billion finance the reform of Irpef rates with the merging of the first two bands at 23% for all incomes up to 28 thousand euros a year. The two interventions strengthen the paychecks of employees up to 1,298 euros per year. The no tax area threshold expands up to 8,500 euros, equating employees and pensioners. News for VAT numbers up to 170 thousand euros: they will no longer pay the November advance. Then comes a linear cut to deductions – except for medical expenses – of 260 euros for those with an income exceeding 50,000 euros. There is also a cut in the Rai license fee: the bill installments drop from 20 euros to 15 for a total that goes from 90 to 70 euros a year.
PA AND HEALTH.
5 billion arrive to renew public administration contracts, to which is added approximately 2.5 billion intended for medical and healthcare personnel. For healthcare, a total additional allocation is expected compared to the increase already foreseen under current legislation of 3 billion, plus 4.2 billion starting from 2026. Among the measures envisaged is the introduction of allowances for doctors and other healthcare personnel committed to reducing waiting list times. While 250 million euros for the year 2025 and 350 million euros from 2026 will go towards strengthening local assistance also with new hirings of healthcare personnel.
FAMILIES AND CHRISTMAS BONUSES.
One billion euros is allocated to support large families and to raise the birth rate. The nursery bonus is strengthened and to support working mothers the State will pay their entire share of the contributions: for one year if they have two children (up to the age of 10 for the youngest) and permanently for those who have 3 children (up to 18 years old). The “dedicated to you” card has been confirmed (600 million euros), the allocation of first home mortgages has been integrated (380 million euros) and the extraordinary contribution for the high energy cost and the electricity social bonus is refinanced for the first quarter of 2024 (200 million euros).
WORK
Confirmed is the 5% tax relief on productivity bonuses and the threshold of up to 2 thousand euros for fringe benefits for workers with dependent children, up to 1,000 euros for all others (they can also be used for rent and first home mortgage payments) . Incentives for the hiring of unemployed women are also planned for 2024, the beneficiaries of the inclusion allowance and young people have been confirmed. Tax relief is also coming for workers in the night and holiday tourism sector. However, the relief for impatriates, i.e. those who return to work in Italy and transfer their residence in 2024 for at least 5 years, is decreasing: the reduction in taxation will be 50% and no more than 70% as in the past. The rules for researchers and university professors do not change.
BUSINESSES
For those who return to invest in Italy, a 50% discount on income taxes will be granted for 5 years. To encourage employment there is a maxi-deduction in the presence of new hires (around 1.3 billion). The entry into force of the plastic and sugar tax has been postponed until 1 July 2024. A tax credit (1.8 billion) will then be provided for those who acquire capital goods intended for production structures in the South, to which are added the resources for the new Sabatini and development contracts (300 million). From 1 January 2024, the global minimum tax of 15% comes into force for multinational groups with annual turnover exceeding 750 million euros.
PENSIONS
Ape and Opzione donna come together in a single tool to support retirement, with a general restriction on early pensions. In place of Quota 103 comes Quota 104 with some specifications to enhance those who want to stay at work (such as the Maroni Bonus). For pensions entirely in the contributory system, the constraint that forces those who want to leave to reach a pension of 1.5 times the minimum is eliminated. The revaluation of pensions according to inflation is then envisaged with a full recovery for pensions up to four times the minimum amount and then bands with decreasing revaluation percentages.
BRIDGE OVER THE STRAIT
The maneuver ensures the necessary resources for the Bridge, and various investments for the benefit of the Regions (50 million), local authorities (100 million for the design) and central administrations (around 27 billion in the period 2024-2038). Almost 2 billion are expected to finance agreements with special autonomies, structural rebalancing of the municipalities that have signed up for deficits and to combat depopulation.