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.
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