After administrative elections, Mario Draghi reopens the tax reform site. And it does so immediately: already today, Tuesday, the enabling law on taxation will land on the table of the Council of Ministers, convened for 15 pm. The goal – already reiterated several times by the head of government – is to remodulate the tax system as a whole to make it more efficient, but without this leading to increased pressure on taxpayers.
The regulatory framework for the intervention will be precisely the enabling law that the executive will approve today, and then send it to Parliament. After the go-ahead from the House and Senate, the ball will return to the government, which will have to implement the provision through a series of legislative decrees. Only then will it be possible to assess whether Italy has respected the commitments undertaken with Brussels on the fiscal side, one of the conditions set by Europe in exchange for the over 190 billion in aid connected to the Next Generation Eu programme.
TAX REFORM: IRPEF RATES, EYES ON THE THIRD BREAKDOWN
For the moment, therefore, we can only speak of contents in generic terms. Certainly, the heart of the law will be the redistribution of the tax burden through the reform of the personal income tax rates. In particular, the aim is to reduce the weight on the third echelon (the one between 28 and 55 euros in gross annual income), which now pays 38%, with a jump of 11 percentage points compared to the latter. The problem is understanding in which direction the change will go: Pd and Leu would like a continuous rate on the German model (i.e. a personalized percentage connected to income, which would guarantee maximum progressivity), while the 5 Star Movement is asking for a total reduction court of the brackets (which, however, would be more difficult to finance). The solution to the puzzle will only come with legislative decrees.
TAX REFORM: THE ABOLITION OF IRAP IS UNDER STUDY
As far as Irap is concerned, the Chambers have asked for its abolition, but even in this case we need to understand how. Merging with IRES, for example, risks producing too high a rate. It is therefore possible that the cancellation is not universal, but limited to professionals and VAT numbers.
THE REFORM OF THE LAND REGISTRY
Another of the (few) certainties is that the enabling law will contain the land registry reform that in Italy has been announced and planned without success for decades and which today the center-right opposes, branding it as a tool to increase taxes on housing. In reality, the revision of the cadastral estimates – a very long and difficult procedure – would increase the fairness of the tax system, aligning the size of the levy to the real value of the properties. The typical example is that of the luxury apartments in the historic districts that the tax authorities still treat as social housing, a classification they fell into dozens and dozens of years ago.
POSSIBLE INTERVENTION ON VAT RATES
Furthermore, according to Ansa, the fiscal delegation will contain an intervention on VAT rates. However, it is not yet known what kind: the consumption tax has immediate and significant effects on inflation (at the center of attention of the ECB throughout the Eurozone), so much will depend on the extent of the resources allocated.
The calculation is not simple, also because it is not yet clear which fiscal measures will be included in the next budget law (which will arrive much earlier than the legislative decrees connected to the fiscal delegation). For now there is talk of a 22 billion maneuver, of which up to half (9-11 billion) could be used precisely for the tax chapter.
