“In 2021 the tax burden will drop by one percentage point compared to 2020, reaching 42.1% of GDP”. It can be read in the Stability Program attached to the Def, according to which “in the following years, an average decline of about 0.1 points of GDP per year is expected, up to 41.6% of GDP in 2024”. Net of the measure concerning the disbursement of the benefit of 100 euros per month, the tax burden – the document states “would go from 41.3% in 2021 to 40.9% in 2024”.
However, according to Istat, the bonuses distributed by the government last year were not enough to keep the tax burden under control, which in the last three months of 2020 rose to 52%, the highest since 2014. A significant leap despite the reduction in tax and social security revenues and against the 39.3% recorded in the previous quarter and an increase of 1.3 percentage points compared to the same period of 2019. On an annual basis, in the face of a collapse in GDP due to Covid 8.9%, the overall tax burden was 43.1% compared to 42.4% in 2019.
The Def also reads “the economic system seems to have reached a form of coexistence with the virus. As highlighted in recent analyzes, there is a greater resilience of the economy, probably also attributable to the ability of operators to adapt, both in terms of production and organizational choices and in terms of social behavior “. The Prime Minister, Mario Draghi, imagines that 80% of Italians will be vaccinated by autumn.
Meanwhile, pension expenditure will rise by 2.3% in 2021, due to the number of newly liquidated pensions, their revaluation at prices and the reconstruction of existing ones. Over the next three years, this expenditure will grow on average by 2.5%, or at a lower rate than that forecast for the entire economy. Consequently, at the end of the forecast horizon, pension expenditure in relation to GDP will drop to 15.8% and then rise to 16% in 2025.
In the years 2019-2022, the document reads, pension expenditure in relation to GDP increases with a peak corresponding to 2020 (17.1%). The ratio grows significantly due to the sharp contraction in economic activity due to the impact of the health emergency that hit Italy starting from February last year. However, this trend is conditioned by the application of the social security measures contained in the Quota 100 law decree.
In fact, these measures determine an increase in the number of pensions in relation to the number of employed as they favor early retirement. Starting from 2023, a three-year period of substantial stability is expected in the incidence of pension expenditure in relation to GDP. From 2026, spending is estimated to return to growth, reaching a peak of 17.4% of GDP in 2036. Spending remains at levels above 17% of GDP until 2045. In the final phase of the forecast period, pension spending is rapidly decreases to 13.9% of GDP in 2060 and 13.4% of GDP in 2070.
Meanwhile, there are 22 bills that will be “connected” to the maneuver for 2022-2024 and among these there is a “delegation bill” for the “tax reform and a second delegation for the tax justice reform. in the Economics and Finance Document approved yesterday by the Council of Ministers. The related bills also include the reform of social safety nets, while autonomy, the minimum wage and the law on representation are also proposed. “incentives for businesses and for the simplification and reorganization of innovative start-ups and SMEs.