The Council of Ministers approved the decree on Thursday evening which introduces a new cut in the tax wedge from July. The measure will lead to an increase in the payroll of millions of employees, who will see the difference between gross and net income shrink. The measure is not structural, but experimental for six months and the cost is equal to 3 billion euros for this year, which would become 5 in 2021, if the measure were confirmed.
Let's see in detail how the new cut in the tax wedge works: who is entitled to the increase and by how much.
CUTTING OF THE TAX WEDGE: FIRST ELEMENT
For gross annual income between 8.173 (limit of the no tax area) e 28mila euros, the bonus is 100 per month. Money which, however, also includes the Renzi bonus of 80 euros, for those who received it, that is, incomes of up to 26 thousand euros (about 11,7 million people), who will therefore in fact receive an increase of a few euros.
CUTTING OF THE TAX WEDGE: SECOND BREAKDOWN
For gross annual income between 28 thousand and 35 thousand euros (bracket which includes around 2,5 million workers), the bonus decreases progressively from 100 to 80 euros per month.
CUTTING OF THE TAX WEDGE: THIRD BREAKDOWN
Finally, for gross annual income between 35 thousand and 40 thousand euros (about one million people), the bonus drops further, always progressively, until zeroed.
TAX AGENCIES: APPOINTMENTS POSTPONED
On the other hand, the appointments of the heads of the tax agencies, which were foreseen in the Council of Ministers, have been postponed (probably to Monday). However, the majority seems to have reached an agreement on the names: Ernesto Maria Ruffini should return to the Revenue, Marcello Minenna would go to the State Property and Antonio Agostini to the Customs and Monopolies.
