[REVISION HISTORY]

Italian tax reform proposals and regional income disparities

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2026-08-31 05:51 UTC → 2026-09-11 00:02 UTC · added ~~removed~~

In late August 2026, discussions regarding Italian fiscal reform intensified as the government explored mechanisms to alleviate the tax burden on employees. One central proposal involves reforming the taxation of the thirteenth-month salary (tredicesima). Replacing the current progressive Irpef application with a flat tax rate could increase December paychecks by 200 to 500 euros, depending on income thresholds. Specifically, proposals suggest lowering the tax rate from 15% to 11% for workers earning up to 15,000 euros to increase net pay for lower-income earners. Newer proposals indicate a planned fiscal maneuver to reduce the IRPEF income tax rate from 23% to 22% for incomes up to 28,000 euros. This structural reform for 2027 also aims to expand the 33% tax bracket to apply to incomes up to 60,000 euros. Simulations by Unimpresa suggest that extending the 33% bracket to the 60,000 euro threshold could save middle-class taxpayers up to 1,000 euros annually at an estimated public cost of 3 billion euros. As the government evaluates measures for the 2027 Budget Law, additional considerations include a potential 10% or 15% flat tax on thirteenth-month salaries for amounts up to 15,000 euros, and the continuation of a 15% substitute tax on specific wage increments and night shift allowances. To support families, the government is reviewing a maternity bonus for working mothers with at least two children and incomes below 40,000 euros, alongside social security contribution exemptions for employees with three or more children. ~~The final implementation of these proposals remains dependent~~ By September 2026, debates expanded to include targeted incentives for youth and female employment. Economy Minister Giancarlo Giorgetti proposed a preferential tax rate on ~~securing financial coverage during the December approval process.~~ salary increases for young workers to incentivize businesses to raise entry-level wages. Political parties are also debating childcare costs, caregiver support, and tax relief for self-employed women.

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