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Italy announces massive tax cuts

Tue10162018

Last update2:33:28 UTC 2018


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Italy announces massive tax cuts

Italy announces massive tax cuts

Italian Prime Minister Matteo Renzi on Wednesday announced a headline-grabbing package of economic reforms, including a 10—billion—euro cut on labour taxes, but failed to write the measures into law.

 

Some 10 million workers — those earning up to around 1,500 euros net a month — will benefit from the tax break, effective from May, Mr. Renzi said. It would boost pay packets by about 1,000 euros per year, he added.

 

“I have no qualms in calling this an operation of historic significance,” Mr. Renzi said.

 

He told reporters he was “defeated” in attempts to introduce the tax cut from April, because of technical difficulties. He admitted the urgency was linked to campaigning for European Parliament elections, due on May 25.

 

Italy badly needs to boost growth and jobs, as it is emerging from the worst recession since World War II. Mr. Renzi was sworn-in during late February, promising a quick—fire succession of measures to revive the economy and make the country more governable.

 

Economists have long argued that high taxes on labour and high energy costs are a major drawback for the country. On Tuesday, national statistics office Istat told parliament that payroll taxes represented 49.1 per cent of gross salaries paid in 2012.

 

The cabinet approved other reforms, including a 3.5—billion—euro plan to renovate school buildings, and decided to ask parliament to give it a mandate to overhaul unemployment benefits — starting a process that could last months, if not years.

 

In a crowd—pleasing move, Mr. Renzi also said 100 ministerial cars — a symbol of the privileges enjoyed by Italy’s political elites — would be sold in online auctions from March 26 to April 16.

 

Upon taking office, the 39—year—old premier — the youngest head of government Italy has ever had — said his credibility was at stake over pledges to deliver quickly on reforms.

 

He scored a major political victory on Wednesday morning, as the lower house of parliament approved electoral reforms that he agreed in January with conservative opposition leader Silvio Berlusconi.

 

“I am not afraid to risk all of myself on a path of reforms,” the prime minister said, stating that he will consider his political career to be “over” if he failed on overhauling parliamentary procedures.

 

World


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