BRUSSELS. The European Commission approves the maneuver of the Meloni government. “Overall it is in line” with expectations and requests, in terms of reduction of public spending and attention to investments for sustainability. But on the front of the fight against tax evasion there are criticisms, which add up to the measures on the pension front. Here it is of the opinion that Italy “has not yet made progress”.
The EU executive recalls that the country was asked to adopt and “adequately” implement the enabling law on tax reform to promote the reduction of taxes on labor and increase the efficiency of the tax system. There is not enough evidence of the tax wedge. In addition, the budget law as presented in Brussels by the centre-right executive includes measures that “are not consistent” with the recommendations on taxation policy and the fight against scoundrels who do not pay taxes. In particular, the policy on the mandatory use of electronic payments and the legal thresholds for cash payments are contested. In essence, the spotlights on the Pos and the minimum threshold of 60 euros to use the device for payments without the use of cash are turned back on.
The Commission also has doubts about the proposed reform of the pension system. Here too, «measures that are inconsistent» with the recommendations for a sustainable reform of the sector are found.
Indications on where the Meloni government, implicitly, is invited to think. Brussels does not reject the manoeuvre, because in any case Italy “limits the growth of current primary spending financed at the national level and plans to finance public investments for the green and digital transition and for energy security”. The priorities of the EU, in terms of agenda and fiscal sustainability, are satisfied. But the footnote to the general approval reads as follows: “The national parliament should therefore take this discussion into account before adopting the budget for 2023”.
Raising cash and Pos payments is not good
Specifically, the Commission contests the provision that increases the ceiling for cash transactions from the current 2,000 euros to 5,000 euros in 2023. Another measure that is considered “not in line” with what Europe is asking for, the measure “equivalent to the tax amnesty » which allows the cancellation of prior tax debts relating to the period 2000-2015 and not exceeding 1,000 euros. Furthermore, the possibility of refusing electronic payments of less than 60 euros without penalties is also targeted.
These measures by the Meloni government contrast with what Europe has been asking of Brussels for the past three years. The Commission’s analysis recalls that on 9 July 2019, the Council recommended in particular to Italy to fight tax evasion, in particular in the form of non-invoicing, inter alia by enhancing mandatory electronic payments, including by lowering legal limits for cash payments.
Pensions, carry on with the old reforms
On the pension front, the Commission does not welcome the renewal, with more stringent age criteria, of the early retirement plans that expired at the end of 2022. Here the recommendations to Italy were those of “fully implementing the past pension reforms” in order to to reduce the weight of pensions in public spending.
Gentiloni: Maneuver done quickly, acknowledge the government
“The judgment is positive, but with critical remarks”, summarizes the commissioner for the Economy, Paolo Gentiloni, who however cannot fail to underline how “in recent years we have addressed Italy with recommendations on topics such as tax evasion, payments digital, on the prudence of pension spending”. In any case, the commissioner is happy with the spending prudence shown by the Meloni government, “and we must acknowledge it, given that the law was passed very quickly”. But he insists and sinks into the Pos: “There are some objectives of the Pnrr that we must avoid contradicting and overturning, and in particular this concerns digital payments”.