As well its devastating effect on populations across the world, the COVID-19 pandemic has also taken its toll on Europe's economies, with many countries seeing widespread business closures, skyrocketing unemployment and rising debt.
Italy is one of the countries that has been worst affected, both in terms of coronavirus deaths and economically due to extended periods of lockdown. Therefore, in an attempt to cushion the financial consequences of nearly 50 thousand deaths and over a million cases, the cabinet has provisionally approved the Italian budget law for 2021.
The draft text of the 2021 Italian budget law bears the signature of the Ministry of Finance and consists of 243 articles, divided into 21 chapters for an economic allocation of about 38 billion euros. The budget will have to be approved by the end of the year, and the 38 billion figure of this "maxi budget" is likely to increase as the plan is revised in the weeks to come. Let's have a look at some of the key elements of the draft budget law in Italy for 2021.
Extra spending for healthcare
First and foremost, 400 million euros of the budget will be allocated to buy vaccines and medication to treat COVID patients, while around 70 million euros will go towards buying rapid tests for the population.
Measures to support struggling businesses
Another key point of the 2021 budget in Italy is helping business that have been hit hard by the crisis and fighting to save thousands of jobs. 5.3 billion euros will be allocated to fund furlough schemes for those forced to temporarily lay-off staff, as well as a two-month extension to a ban on dismissals, a measure that was due to end in January. This means that redundancies will be blocked until 31st March 2021 regardless of the number of employees in the company.
Extension of home bonuses
An important element of the Budget Law 2021 will be the extension of the home bonus, from the extension of the facade bonus to the renovation bonus, including the ecobonus, the mobile bonus, the seismic bonus and the green bonus. There is currently no news concerning the 110% ecobonus where an extension is possible until 2024.
Short-term rentals
Another section of document is dedicated to short-term rentals. The possibility to use a 21% dry coupon will be reserved for those who rent no more than four flats per tax regime, with the same limit for real estate agents and online portals.
One-off cheque and baby bonus in 2021
A measure that is being called the "one-off cheque" will make its debut in 2021 with an additional 3 billion euros in 2021 and 5.5 billion from 2022 onwards. In 2021, the baby bonus will also remain in force for all children born or adopted from 1st January to 31st December 2021, while families will also receive a 7-day paternity leave extension.
Tax reform
In order to implement the tax reform, a fund will be set up with a budget of 2.5 billion euros for the year 2022 and 1.5 million euros from 2023 onwards.
Pensions
As far as the pensions chapter is concerned, the 2021 Budget Law provides for the extension of the APE Sociale pension advance by one year, with an extension of the number of workers. The extension of the "women's option" is also anticipated, a measure with covers early access to retirement for women with the calculation of the pension provision under a full contribution system.
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