“The pursuit of a careful budget policy” does not mean that with the maneuver the government did not aim to provide “answers to the country’s profound needs”.
Economy Minister Giancarlo Giorgetti said this at the hearing on the measure, claiming what was done with the budget law and citing among the interventions also that on the Irpef which, with the reduction of the rate from 35 to 33% “protects taxpayers with average incomes, and by extending the range of those who had benefited from the tax wedge it involves 32% of the total taxpayers” for a value of the expected average benefit of 218 euros per year” which reaches for the highest bracket concerned the “440 euros”.
The maneuver “is part of an uncertain economic framework in which the attention on the budget policies pursued by the States is very high. A budget policy attentive to guaranteeing the sustainability of the debt and in line with the EU governance rules can guarantee the economic and financial stability of our country which has to renew 400 billion public debt securities every year”. Thus again Minister Giorgetti, underlining that the maneuver “confirms the strategy followed by the government in the last 3 years, an approach which in a complicated period” has balanced “support for specific sectors with the need to keep the public accounts in order”.
“Careful management of budget policy has contributed to the recent improvement in ratings and public debt securities. The results reflect the growing credibility on the markets conquered by Italy from which financial institutions and companies have also benefited. Maintaining a responsible budget policy is a fundamental requirement for our country.”
“First of all this is the last” scrapping, “secondly this – the minister remarked – is a sort of spreading, an instalment. We don’t think of losing revenue, naturally it is distributed differently. It is a rule aimed above all in favor of those companies that cannot or would not be able to continue their activity if they had to repay all the debt immediately”. “On the one hand there is this spread of debt, on the other a bit of relief for those who are having difficulty at the moment”, he added.
Bank of Italy: “The maneuver does little on income inequality between families”
“The difference in tax regime could have a negative impact by encouraging the phenomenon of undeclared short-term rentals.” This was stated by Mauro Orefice, coordination president of the Sections gathered in the control of the Court of Auditors in the hearing on the maneuver, commenting on the measures of the budget law relating to short-term rentals, which raise the flat tax rate from 21 to 26 percent.
As regards scrapping, Orefice said, “the regulation introduced partially diverges from previous regulatory interventions because it limits the possibility of resorting to the facilitated definition only to cases in which the taxpayer has failed to pay income and value added taxes, in any case subject to the declaration, and to formal and paper-based checks on the declarations” but “even if the perimeter is limited” the intervention “in any case suffers from the critical issues, repeatedly underlined by the Court, and, in particular, the possibility that the measure could reduce tax compliance, the risk that the Treasury could become a ‘financier’ of defaulting taxpayers, encouraging non-payment as a form of liquidity, uncertainty about the effects on public finance balances”.
Bank of Italy: “Evasion is a damage, scrapping does not encourage recovery”
“Tax evasion, as is known, damages growth and produces inequity, disadvantaging businesses and honest citizens. The maneuver opens up a new “scrapping”: an instrument which in the past has not increased the effectiveness in recovering revenue”. Fabrizio Balassone, Deputy Head of the Economics and Statistics Department of the Bank of Italy, said this during the hearing on the maneuver at the joint Budget Committees of the Chamber and Senate.
The new subsidized definition entails “a revenue loss of 1.5 billion in 2026 and 0.5 billion on average in the following two years”, said Balassone. “According to data provided by the Revenue Agency, as of March this year the payments made are in the order of half of what would have been due for the various editions of the facilitated definitions. Similar collection problems could also arise with the procedure provided for by the new facilitated definition”, he warned.
It can be estimated that overall the measures of the package to support family income “do not lead to significant changes in inequality in the distribution of equivalent disposable income between families”, said Balassone. The reduction in the Irpef rate for the second income bracket favors households in the highest two fifths of the distribution, but with a modest percentage change in disposable income. The effects of the main social assistance interventions are instead concentrated on the first two fifths of families and are also modest”, he explained.
Istat: “Most of the resources from the Irpef cut go to the upper brackets”
The Irpef cut envisaged in the budget “would involve just over 14 million taxpayers, with an average annual benefit of around 230 euros. The beneficiary families would be around 11 million (44% of resident families) and the average benefit would be around 276 euros (in each family there can be more than one taxpayer)”, underlines the president of Istat, Francesco Maria Chelli in the hearing before the Budget commissions of the Senate and Chamber.
“By sorting families based on their equivalent disposable income and dividing them into five groups of equal size – he continued – it emerges that over 85% of the resources are allocated to families in the richest fifths of the income distribution: in fact, over 90% of families in the richest fifth and over two-thirds of those in the penultimate fifth are affected by the measure. The average earnings range from 102 euros for families in the first fifth to 411 for families in the last. For all income classes the benefit involves a lower variation 1% of family income”.