The parliamentary process of the draft law on tax reform begins
More than 50 years after the last reform, the government of Giorgia Meloni implements tax reform. The Council of Ministers has approved the bill enabling the government. Of course it will take some time before closing the game since the delegated decrees will be able to arrive within 24 months of the entry into force of the enabling law. Many new arrivals, welcomed by business representatives. The package, which is a real tax reorganization made up of 22 articles, will intervene on Irpef, Ires, VAT and a series of minor taxes.
Irpef passes from four to three brackets
As announced by the Deputy Minister of Economy, Maurice Leo, the tax on natural persons will undergo a reduction in bands. The change will go hand in hand with a cut to the jungle of deductions and deductions. “We have approx 600 tax expenditure. We are talking about 156 billion. You can intervene there. With careful review, resources can be found to better calibrate the rates” Ababa Leo declared some time ago.
Furthermore, the text provides for “the identification of a single tax exemption band and the same tax burden regardless of the different categories of income produced, favoring, in particular, the equation between employee income and pension income” .
The government’s goal is to proceed with simplification, reducing the general tax burden without however putting the public finances at risk.
The goal remains the flat tax
The revision represents an intermediate stage for the realization of the flat tax incrementale for everyone, including employees. The intervention on personal income tax is decidedly delicate. In 2022 the tax brought 205.8 billion into the public coffers. Of the total figure, about 81 come from public sector employees and 85.6 from private sector employees.
“The delegation provides for an organic and overall review of the system that will have to intervene, in compliance with the principle of progressiveness and with a view to moving towards a single tax system, reorganizing the deductions from the tax base, the income brackets and the rates of tax, deductions from gross tax and tax credits, with particular regard to the composition of the family unit and the costs incurred for raising children, the protection of the home asset and people’s health, education, social security complementary and with the aim of improving energy efficiency, as well as reducing the seismic risk of the existing building stock” reads the draft.
Finally “the possibility has been introduced for all taxpayers to deduct the mandatory social security contributions when determining the category income, allowing, in the event of inadequacy, to deduct the excess from the total income. In this way, the treatment of income from employment and assimilated to that of income earned by self-employed workers and individual entrepreneurs is assimilated” the document continues.
Goodbye Irap, cut to IRES. VAT news
The draft enabling law provides the exit from the scene of Irap. At the same time it provides for the “establishment of a surcharge such as to ensure an equivalent tax revenue capable of guaranteeing the financing of health needs, as well as the financing of Regions with health budget imbalances or which are subject to recovery plans” as required by law in the text .
It also sanctions the review of business income with a cut in the Ires rate for companies that reinvest profits by creating jobs. For IRES, the 24% cut will be financed by a review of tax credits.
A rationalization of the number of VAT rates. There will be a revision of the rules on exempt transactions to follow the Brussels provisions, as well as a change to the VAT deduction system. Currently set at 22 per cent, for the ordinary rate, and 4, 5 and 10 per cent, for the reduced rates.
In the new version of the tax, in line with Community diktats, it will be possible to have “two reduced rates of no less than 5 per cent, one reduced rate lower than this amount and also a so-called “zero rate”, i.e. an exemption with the right to deduction” as the text refers. A simplified and rapid procedure for refunds to citizens and businesses will also start
New limits on fringe benefits
“It is envisaged that, in particular, there will also be a review of the limits of non-competition to the income of fringe benefit, i.e. those goods and services that the employer makes available to its employees with the aim of encouraging and enhancing the worker, as well as creating loyalty in the worker himself” reads the document. In particular, the government wants to privilege “the aims of sustainable mobility, the implementation of supplementary pensions, energy efficiency, social solidarity and contributions to bilateral bodies”.
Finally, simplifications are envisaged for registration tax, inheritance and gift tax, stamp duty and other indirect taxes, other than VAT. “The fundamental objectives of the enabling law are the rationalization and simplification of the tax system, to be implemented also through the reduction of obligations to be paid by taxpayers and the elimination of the so-called micro-taxes, whose revenue for the treasury is completely negligible ” concludes the document. As for local taxes, “the government is delegated to adopt one or more legislative decrees reviewing the tax system of local entities, i.e. municipalities, provinces and metropolitan cities”.
Penal sanctions
Criminal tax sanctions are lightened, in particular those connected to the crime of unfaithful declarations, for companies adhering to the ‘cooperative compliance’ that have engaged in non-malicious conduct and promptly notify the tax authorities. Not only. In the review of tax penal sanctions, specific emphasis will be given to the hypothesis of “the inability to meet the payment of the tax, not dependent on facts attributable to the subject himself”.
Furthermore, for criminal sanctions, it is indicated that specific importance should also be attributed “to the definitions reached in administrative and judicial proceedings for the purpose of assessing the criminal relevance of the fact”.
The reorganization of the games is also underway
“The reorganization of the provisions in force on the subject of public games, confirming the organizational model of the system constituted by the concession and authorization regime, as indispensable for the protection of public faith, order and safety, for the prevention of money laundering of the proceeds of criminal activities, as well as for guaranteeing the regular flow of the levy tax levied on games” explains the document. Changes are also envisaged on the sanctions front and on collection procedures.