The Meloni government is working on the 2023 tax reform in Italy, the draft of which should be ready between the end of February and the beginning of March. According to the latest news, the main novelties should concern the new IRPEF income tax rates and the family quotient, the flat tax extended to employees and pensioners, as well as measures on IRAP, IRES and VAT. Let's find out the latest news on the tax reforms in 2023 by the Meloni government.
What is Italy's tax reform?
The term tax reform refers to a change made by a state, or territory, with regard to the set of measures in the field of tax legislation. Through the reform, the various rules established by the tax system are thus changed to configure a new system.
New IRPEF interest rates and family quotient
One of the main objectives of the Meloni government in terms of tax reform is to arrive at a three-rate IRPEF system: 23%, 27% and 43%. On this, point, as deputy minister Leo emphasised, it is necessary to find the necessary cover in advance and without budget deviations.
Another hot topic of the 2023 tax reform is the so-called family quotient, a mechanism that bases taxation on the number of children. The Meloni government, on this point, is in the study phase to carefully evaluate the advantages and disadvantages, because if it is true that families with children are favoured over those of singles, it is equally true that the risk is that nuclei in which one member does not work are favoured.
Flat tax for employees and pensioners
Another ambitious goal is the introduction with the tax reform of the flat tax extended also to employees and pensioners. How? Through a single tax rate for all, not only for the self-employed, who already benefit from it, up to a limit of 85,000 euros of income as established by the last Budget Law.
The extension of the flat tax to 15%, according to the first hypotheses of tax reform, could be absorbed into the IRPEF rates, as the first bracket for all incomes, as is already the case for the self-employed. The aim of the Meloni government is to achieve horizontal equity, i.e. that all incomes (employees, pensioners, self-employed) are taxed in the same way.
Revision of tax deductions and allowances
Under the current system, income brackets between 120,000 and 240,000 euro have their tax benefits and deductions progressively reduced to zero (with the exception of healthcare and building renovation): the idea is to extend the reduction to other income brackets.
Measures for IRES, IRAP and VAT
According to the latest news on the 2023 tax reform, the Meloni government would be inclined to cancel IRAP. While there could be a reform of VAT and the respective reduced rates (at 4%, 5% and 10%), perhaps with a reshaping for some categories of goods.
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