Full tax reform will take years says Draghi

(ANSA) - ROME, OCT 5 - It will take years to complete a much-needed reform of the Italian tax system, Premier Mario Draghi said after the cabinet passed an enabling law on a wide-ranging package on Tuesday.
    "You might have the feeling that this is the last word on the tax system but luckily or unluckily the process isn't so simple, it will take many years," he told a press conference.
    Draghi vowed that no one would pay less or more than they do at the moment and said a land-reform registry reform that determines property values, which has seen the nationalist League party critical, would be "re-discussed in 2026".
    After the current planned changes to the registry, the premier said, the average taxpayer "will not notice anything".
    On the enabling law, too, he said, "there will be other moments for talks" after the League deserted the cabinet talks.
    Economy Minister Daniel Franco said the system would now be "more efficient and less distorting".
    He said the pillars of the system such as personal income tax IRPEF and VAT would remain in place "but will be reconsidered".
    Franco said recouping dodged taxes was the basic condition for cutting taxes.
    He also said the government would cut the tax wedge, which is five points above the EU average.
    The tax wedge is the sum of taxes (direct, indirect or in the form of social security contributions) that weigh on the cost of labour, both relating to employers, and the income of workers, employees and the self-employed.
    Tourism Minister Massimo Garavaglia, the representative of the League in 'control room' talks among government parties on a draft reform of Italy's tax system, left the meeting early on Tuesday in order to take a closer a look at the document, sources said.
    League ministers then failed to show up for the subsequent cabinet meeting on the reform package, sources said.
    The reform reportedly included an overhaul of Italy's land-registry values, which are the basis for property taxes.
    The League had said it was opposed to this, although Premier Mario Draghi has promised a revision of the system will not entail higher property taxes for anyone.
    The premier told the press conference there will be further discussion of the issue in five years time.
    The government intends to gradually ease IRPEF income-tax rates for middle earners as part of a comprehensive reform of Italy's tax system, according to the draft bill.
    The draft reform said the aim is to boost participation in the labour market, especially among young people, and encourage business activity.
    It added that it will seek to gradually reduce "the excessive variations of marginal rates" of taxation.
    The draft reform features 10 articles dealing with aspects of the system ranging from income tax, to VAT, business tax IRES and a revision of the land-registry values, which are the basis for property taxes. (ANSA).