Government, the tax reform arrives between the personal income tax and the fixed tax

After two days of discussions with the social partners and employers’ associations, tomorrow the Government is preparing to take the bill that authorizes the tax reform to the Council of Ministers. It is a text divided into 5 parts and divided into 22 articles that mainly aims to simplify the tax system and reduce the pressure on employees. Among the objectives are the revision and gradual reduction of the IRS with a view to the transition to the single rate. Yesterday the trade unions, especially the CGIL and the CISL, expressed doubts about the measure, while today the employers’ associations generally expressed their appreciation for the text, referring the legislative diplomas that will contain the technical standards and specifications of the measure to judgment on the merits. In the meantime, the government – the Minister of Economy, Giancarlo Giorgetti, the deputy minister Maurizio Leo and the undersecretary of the Presidency of the Council, Alfredo Mantovano were present at the meetings -, reiterated its availability for the discussions, which will continue throughout the process of approval of the reform, confirming the will to draw up tables on each state of progress of the work. While Deputy Prime Minister Matteo Salvini stings the social partners: “If the CGIL says no, it means that it is a reform well done”.

Once approved by the CDM, the reform will have a long gestation period: the timetable drawn up by the government foresees approval by Parliament by May and then 24 months for the legislative decrees of implementation. Among the main innovations contained in the reform are the reduction to three personal income tax rates, the objective of a single tax for all by the end of the legislature, the simplification of VAT rates, the rationalization of reporting obligations and the reorganization of local taxes. The reform project also provides for the review of tax expenditure, already in more than 600 items, with the hypothesis of staggering flat-rate income, equalizing the tax-free area for workers and pensioners and extending the incremental flat-rate tax also to working employees . For companies, on the other hand, a reduction in the IRES rate is assumed in the case of qualified investments and new hires.

The drafts of the text also speak of the gradual cessation of IRAP, the regional tax on productive activities, with priorities for partnerships, associated companies and companies between professionals with a view to instituting a super-tax that ensures an equivalent revenue. However, the intervention will have to be modulated in order to guarantee the financing of the health needs of the Regions. VAT will also be revised to make it more compatible with EU law. A rationalization of the number of tax rates is possible. With regard to local taxes, however, among the various items, the reform aims to consolidate financial autonomy and ensure the implementation of fiscal federalism. There is also room for simplifying taxpayers’ reporting obligations, starting with forms, through new digital solutions.