Italy to tackle later this year how to fund tax cuts: Deputy Prime Minister

The Italian government is committed to forging ahead with ambitious tax cuts in 2020 and will discuss how to finance them later in the year, Deputy Prime Minister Luigi Di Maio said on Thursday.

“Our objective is to respect the commitment to cutting taxes. The measures needed to cover this cost will be part of discussions on the 2020 budget law,” Di Maio said in an interview with Radio Anch’io.

The budget law must be approved by year end.

Di Maio said the proposal of introducing a so-called “flat tax” would apply only to incomes of up to 60,000 euros to 70,000 euros ($67,800-$79,000) per year.

The European Union moved closer on Tuesday to taking disciplinary action over Italy’s growing debt, a procedure that could saddle the country with fines and alienate investors.

Italy and the European Commission have been at loggerheads on fiscal policy since an anti-austerity government of the right-wing League and anti-establishment 5-Star Movement took office a year ago promising to boost welfare and cut taxes.

Asked if the government would finance its tax cuts by increasing the budget deficit, Di Maio told Corriere della Sera newspaper earlier in the day that it “will do what Italians need”.

Reuters reported on Wednesday that Rome aims to convince the EU to delay until the autumn a decision on whether to open a disciplinary procedure over its finances, which are expected to look healthier after tax revenue data in July.

source: Reuters