By Giuseppe Fonte
ROME (Reuters) – Italy expects its tax burden to be broadly unchanged at 42.3% of gross domestic product (GDP) through 2027, a new Treasury document shows, despite Prime Minister Giorgia Meloni’s tax-cutting pledges.
The right-wing ruling coalition has repeatedly committed to helping the economy by reducing taxes and social contributions weighing on payroll workers, the self-employed and firms.
The document detailing fiscal policy targets for 2025-2027 estimates the tax burden at 42.3% of GDP in 2024, up from 41.5% in 2023 and 41.7% in 2022.
“The tax burden is expected to remain stable at 42.3% over the time horizon considered,” the Treasury said in the document published on its website.
Luigi Marattin, a centrist opposition lawmaker, said the ruling coalition had failed to fulfil its “historic promise” to cut taxes.
“We now discover that the government plans to end the legislature with a higher tax burden than at the beginning,” he added. Meloni took office in late 2022.
Italy is a relatively high-tax country, but the burden is unevenly spread.
The country has low taxation on financial assets that are typical sources of income for the wealthy, and favourable rates for the self-employed, while low and middle-income workers lose a large portion of their salaries to tax and social contributions.
Under pressure to ease the burden on the middle classes, Meloni had hoped to ease taxes for those earning 50,000-60,000 euros ($61,650.00) in the government’s latest budget, but failed to find the 2.5 billion euros of funding needed for the measure.
Highly indebted Italy has pledged to bring its budget deficit below the European Union’s 3% of GDP ceiling in 2026 from 3.8% in 2024, leaving it limited leeway to cut taxes.
Among policies laid out in the document, the Treasury said it would focus on “preventive (tax) agreements” with foreign multinational groups to attract their business and ensure certainty in relations between the public administration and companies.
Under preventive tax agreements, companies agree with the government how to calculate their taxes to avoid litigation risks.
($1 = 0.9732 euros)
(Reporting by Giuseppe Fonte, additional reporting by Antonella Cinelli, editing by Gavin Jones and Susan Fenton)
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