The government approves the Def: stop to increase VAT, maneuvering from 29 billion

• Maneuver, Count: "We found the 23 billion, we sterilize the VAT"
• Manovra, Gualtieri: there will be no restrictive measures but a small expansion
• Maneuver, Zingaretti: "We will have to pay off the debts made by Salvini and rebuild the trust"

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Green light from the Council of Ministers to the update note to the Def. The maneuver for 2020 will be around 29 billion, as can be seen from the draft update note to Def.

"We approved this first public accounting document that announces the approach of the maneuver: it is an important document and I want to confirm that we have sterilized the increase in VAT. But we are not satisfied with this: I asked Parliament for confidence on 29 points programmatic "and with the maneuver the government begins to implement them. Premier Giuseppe Conte said at a press conference at Palazzo Chigi.

"We want to reduce the tax wedge, it is our goal, how to lower the VAT rates, - he added - we cannot do everything in the first year, but we have set the reforms". "Already this year - the president of the council said - we plan the modernization of the country, digitization, bureaucratic simplification, the green turnaround, to orient the whole system towards the circular economy and immediately protect our environment".

Conte explained that the government intends to give a signal also to people with disabilities. "We want to pursue a family act that puts in order all the forest of tax breaks and benefits for families", and a disability code will also be adopted.

As for the fight against tax evasion, Conte said: "We are aware of having to work to tighten the penalties of the great tax evaders but also that a great social and economic pact must be created for all citizens because one of the most effective tools is to incentivize the use of electronic money and digital transfers ".

The numbers of the Def
Interventions are planned, including new revenue and cost reductions, of around € 14.4 billion. The flexibility on the deficit is around 14.4 billion, 0.8% of GDP.

"The public finance maneuver for 2020 includes the complete deactivation of the VAT increase", is written in a draft of the update note to Def.

As for the deficit and GDP ratio, it is 2.2% both in 2019 and in 2020. Then it falls in the following two years: to 1.8% in 2021 and 1.4% in 2022.

"In the last 12 months, GDP growth forecasts have undergone continuous downward revisions - reads the draft report to Parliament accompanying the update note to Def -, rising to 0.1 percent in 2019 and 0.6 percent in 2020, compared with an estimated 1.5 percent and 1.6 percent in Nadef 2018 respectively ". "As regards the projection of the debt / GDP ratio, starting from the level envisaged for the end of 2019 (135.7%) - the draft update note to the DEF reads - and assuming proceeds from disposals and other capital gains destined for public debt repayment fund for 0.2 percentage points of GDP per year, the ratio would drop to 135.1 per cent in 2020 and then to 133.6 per cent in 2021 and 131.4 per cent in 2022 ".

"The additional commitment necessary to reduce the tax wedge in 2020 is estimated at 0.15 percentage points of GDP, which will rise to 0.3 points in 2021", reads the draft update note to Def. This is around 2.7 billion in 2020 and around 5.4 billion in 2021.

"The resources for the financing of the interventions foreseen by the maneuver for 2020 are equal to almost 0.8 per cent of GDP (about 14.4 billion)" divided as follows: 7.2 billion (0.4% of GDP) from the struggle evasion, including the "spread of traceable payment instruments", 1.8 billion from the spending review (0.1% of GDP), 1.7 billion (about 0.1% of GDP). The rest will come from cuts to subsidies and other fiscal measures.

On the subject of privatization, the draft update note to the Def sets a target of 3.6 billion in 2020 and 7.2 billion in the two-year period 2021-2022. They are not expected in 2019. "The MEF revises its revenue target for 2019 to 0.0 percentage points of GDP, the target for 2020 at 0.2% percentage points. It also introduces a target of revenue of 0.2% of GDP per year for the two-year period 2021-2022 ". These objectives, it is stated, include extraordinary dividends and other financial income destined for the public debt amortization fund.

"The new government was quickly formed and found itself having to update the DEF and set the imminent budget session in very short time", writes Roberto Gualtieri in the premise that opens Nadef, as we read in a draft. "We are convinced that we can give a change of pace to economic policy already with the next Budget law and that an opportunity has opened up to design incisive reforms and prepare a real revival of the Italian economy", he adds.

Check a "super bonus" for those who pay with cards and debit cards in the sectors most at risk of evasion. To be combined with the monthly cashback mechanism on all traceable payments and to be given all at once, perhaps at the beginning of the year (so much so that it would have already been renamed the 'Befana bonus'). It is one of the hypotheses under consideration in view of the maneuver to promote electronic money. However, qualified sources would explain, within the more comprehensive plan of the "new VAT", with remodulation of the rates.

The amount of the bonus will depend on the resources, but the goal is to repay up to 475 euros to those who, in the previous year, spent up to 2,500, with a card or debit card, to buy in the sectors most at risk of evasion.

"My goal is to allow VAT to be lowered. We are working - the prime minister said - to lower the VAT on the bills from 10 to 5 as well as lowering the VAT on products such as bread, milk and fruit. But to do this we need to increase the use of alternative means to cash and to do this the plan is to give everyone the possibility of accessing electronic means of payment at no cost ".

On Twitter, Minister Dario Franceschini: "Notice to mariners: the daily craving for visibility wears governments. Already seen everything. Fights about VAT are invented, when no one wants to increase it, just to have some spotlight on. The PD chooses seriousness and is committed to the tax wedge to increase salaries ".

The leader of the League, Matteo Salvini, goes on the attack: "economic fraud, with billions of new taxes. They have already betrayed all the promises made in August".