Italy’s Meloni to unveil budget with 30 bln euros to lift economy

  • More than 21 billion euros to settle energy bills
  • Part of the funding comes from an additional tax on energy firms
  • Relief from tax liabilities, reduction in expected retirement age

ROME, Nov 21 (Reuters) – Italian Prime Minister Giorgio Meloni’s first budget, due to be approved by his cabinet on Monday, will focus on reducing high electricity bills and reducing taxes on salaried and self-employed workers, government officials said. .

The Cabinet will meet at 8.30 pm (1930 GMT) to discuss and approve the bill. It will then go to parliament, which must pass by the end of the year.

The expansion measures total more than 30 billion euros ($30.8 billion), with Rome planning to finance around 70% of the package by driving next year’s budget deficit to 4.5% of gross domestic product (GDP) from to the 3.4% forecast for September.

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Another 3 billion euros will come from a windfall tax on the profits of energy companies that have benefited from rising oil and gas prices, officials said.

With a tax rate of 33% or more, the tax will follow the framework proposed by the European Commission and will replace the previous scheme that has caused criticism and refusal to pay from many energy firms.

Other potential sources of funding are a tax on home deliveries to help sellers hit by Amazon ( AMZN.O ), and a cut of nine billion euros earmarked for 2023 from Italy’s “citizen” poverty relief scheme.

SLOWING THE ECONOMY

Meloni will spend more than $21 billion next year to help firms and households pay their electricity and gas bills, officials said.

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Around 5 billion euros are expected to go towards reducing the “tax wedge”, the difference between what an employer pays and what an employee makes at home, and benefits low and middle-income workers.

With inflation, Italy’s economy is expected to slow significantly in 2023, with GDP increasing by just 0.6% after a figure of 3.7% this year, according to the latest Treasury estimates.

Using one of his main fiscal proposals, Meloni will increase the 15% single tax rate for the self-employed to an annual salary of up to 85,000 euros, from the current ceiling of 65,000 euros.

One of the most controversial items in the budget is the amnesty for tax payments up to 1,000 euros from before 2016. Critics say such exemptions, which are unusual in Italy, encourage people not to pay taxes.

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Meloni is expected to conditionally lower the retirement age next year, stating that Italians will be able to draw their pension from age 62 as long as they have paid in 41 years of contributions.

Under the rule set this year by Meloni’s predecessor Mario Draghi, people are given a state pension at age 64 if they have worked for 38 years.

Other possible measures include making consumer essentials such as pasta and bread, and baby care products and feminine hygiene tampons temporarily exempt from sales tax.

($1 = 0.9746 euro)

Edited by Gavin Jones and Keith Weir

Our standards: The Thomson Reuters Trust Principles.

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