There is growth but it is slowing down, Italy must intervene with its capital and other measures. The OECD makes the list and asks our country, for example, to “shift taxes from work to property and inheritances, while ensuring the maintenance or increase of income”, reads one of the OECD recommendations contained in the Economic Study on Italy. “The transfer of taxes on labor to inheritances and properties would make the fiscal mix more favorable to growth”, writes the OECD, which also calls for “updating tax base calculations taking into account distributional impacts and “continuing to combat tax evasion, notably by continuing to promote the use of digital payments and reducing the maximum limit for cash payments”. And to cut “high pensions”.
The 2023 OECD Economic Study on Italy estimates economic growth of 0.7% for this year, respectively, after the 0.7% recorded in 2023 and the 1.2% expected for 2025. Global inflation is expected to gradually decrease from 5 .9% in 2023 to 2.6% in 2024 and 2.3% in 2025, in line with underlying inflation which is expected to reach 2.5% in 2025. Among the recommendations it also recommends the elimination of “expensive” tax expenditures that they have no economic or distributive justification, for example, limiting the coverage of the deduction for the dependent spouse. All taking into account the fact that the share of labor taxes in total income is higher than in similar OECD economies, while revenues from VAT and inheritance taxes are lower”, notes the document. And this happens because “a a significant part of revenues is lost due to tax evasion”, while the income tax base is eroded by expensive deductions-deductions. Furthermore, for the OECD “it is possible to reduce the erosion of the tax base, also by reducing expenditure taxes and limiting the proliferation of special flat taxation regimes”.
Once again, the OECD also talks about pensions: “It is necessary to save on public expenditure” and in this context pensions represent an important part of global expenditure. In the short term, this problem could be contained by phasing out early retirement schemes. The partial deindexation of high pensions should be maintained in the short term, but replaced in the medium term by a tax on high pensions that is not related to previous social security contributions.” “This solidarity contribution,” writes the organization, “could be maintained until the relative income of pensioners is in line with the OECD average”.
Source: IL Tempo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
