Tax reform, two Mef schemes to reduce taxes

• Government, the "Draghi Project" takes shape: reforms for taxation, PA, civil justice

• Tax, Ruffini: Irpef is an incentive to productivity

Share

05 April 2021 Tax reform always at the center of the political action of the Draghi Government.

At the time of his inauguration as Prime Minister, the taxation with the tax reform was one of the topics on which Mario Draghi provided more information.

The premier spoke of a more progressive personal income tax and cited specific examples of the revision of rates and brackets.

Draghi charted the way forward, saying: "The tax system is a complex mechanism, the parts of which are linked to each other. It is not a good idea to change taxes one at a time" and speaking of "a profound overhaul of the tax system. Irpef with the dual objective of simplifying and rationalizing the structure of the levy, gradually reducing the tax burden and preserving progressiveness ".

Following this line, the Ministry of Economy and Finance is studying how to reduce personal income taxes using two models to be taken as a starting point for debate to arrive at the overall reform of the Italian tax authorities.

The Irpef taxation systems identified by the Mef as alternative to the current one are two: three-tier tax rates and a continuous rate based on the German model.

Both systems have the objective of reducing the tax burden on personal income tax, an increase in GDP and a drop in unemployment.

For the

the calculated lower revenue is 19 billion, for the

the calculated lower revenue is 20 billion.

The committed resources required are over 10 billion in the three-tier system while in the continuous rate system 11 billion.

Both models obtain the result of a reduction in the levy for all income brackets and adjust the progressivity of taxation by repairing the surge in the taxation curve that affects average incomes.

Average incomes are those between 28 thousand euros and in particular incomes between 53 thousand and 45 thousand euros. 

The introduction of a three-tier personal income tax system would lead to an increase in real GDP of + 0.727% while the continuous rate system (German model) would lead to an increase in real GDP of + 0.754%.