“The budget package will be around 27 billion euros and will not cause any overruns. Indeed, let's break the news: from 2016 the public debt will begin to fall”. The Prime Minister, Matteo Renzi, said it yesterday evening during the television show Otto e mezzo.
“GDP growth was forecast at +0,7% – continued the Premier -, but in the update of the Def that we will present to the Council of Ministers on Friday we will revise this figure to +0,9 percent. For next year we had forecast a +1,4% and an increase will come in this case as well, but out of respect for the Economy Minister I will stop here”.
PLAN FOR THE SOUTH
As for the contents of the new Stability law - which will be presented on 15 October -, the government now seems determined to include a plan for the South in the provision. Here are the main points:
- investments.
To relaunch the Mezzogiorno, the Executive plans to use around 3 billion euros which will be released by the EU flexibility clause for investments. In particular, the resources should be used to carry out works that can be started immediately in the Municipalities and ready-made inter-regional projects.
- IRES.
“In 2016 we could start by reducing IRES in the South – said the Deputy Minister of the Economy, Enrico Morando, speaking at the assembly of the Industrial Union in Turin – and then decide, but immediately, that the generalized reduction we will do it in 2017, I don't know if at the 20% level (compared to the current 27,5%, ed), or if we will stop a little above”.
So far, the plan was to cut the tax on corporate profits for the whole country from 27,5% to 24% in 2017. On the other hand, anticipate the reduction by one year only for the SMEs of Puglia, Basilicata, Calabria, Campania and Sicily would not be particularly onerous, since the Ires revenue of southern companies is worth just 10% of the 35 billion that the tax guarantees each year to the state coffers.
- Work.
A package of measures should arrive on this front: tax credit for those who hire (on the lines of the one already granted in 2008); reduction of social contributions; bonuses to support mergers and acquisitions; contribution relief of 15% for agricultural entrepreneurs and increase of that already provided for full-time construction workers (currently 11,5%).
For the South, "exceptional measures are not so much needed - Treasury Minister Pier Carlo Padoan said yesterday to the microphones of Sky Tg 24 -, as much as the implementation of general reforms and then a rationalization and boost to public investments, especially in infrastructure" .
VAT NUMBER
In addition, some tax innovations for self-employed workers throughout the country should be included in the Stability law. According to what was anticipated during the Pd festival in Bologna by Professor Maurizio Del Conte, Renzi's consultant, there should be two main innovations.
1) INPS. The contribution to the INPS separate management was blocked last year at 27,72% but should gradually rise to 33%. The government, however, is committed to ensuring that no increase will come this year as well. The contribution could even be reduced to 25% during 2016, but the cut will not be included in the budget.
2) Personal income tax. The aim is to introduce a flat-rate scheme of minimums at 5% up to 25 thousand euros for a period of 3 or 5 years for all new VAT numbers. After the first period, one of the following two possibilities could take shape: a rate of 15% always for 3 or 5 years before the transition to normal taxation, or a stable 15% for all self-employed people with revenues under 25 thousand euros.
