The government's new flat tax is
"unrealistic" in Italy, the Bank of Italy said Thursday.
The flat tax, contained in the government's tax enabling bill,
"could turn out to be an unrealistic model" for a country, like
Italy, "with an extensive welfare system, especially in light of
public finance constraints," warned the head of the Bank of
Italy's Tax Assistance and Advisory Service Giacomo Ricotti in a
hearing at the Lower House finance committee.
For Ricotti, "it is not clear either which tax incentives will
be the subject of rationalisation or the amount of resources
that will be recovered".
Premier Giorgia Meloni's government is aiming to bring in a flat
tax for all workers in Italy by the end of the current
parliamentary term, in less than five years' time, according to
its tax-reform enabling bill.
At the moment, Italy has a 15% flat tax, but it only applies to
self-employed people earning up to 85,000 euros a year at the
moment.
The reform said a step towards a flat tax for all will be the
reduction of the number of income-tax bands applied to people
employed by private-sector firms and the State from four to
three.
The reform also seeks to significantly cut down the number of
taxes in force in Italy.
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