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Italian tax reform proposals and 2027 Budget Law planning

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2026-10-09 06:37 UTC → 2026-10-13 06:03 UTC · added ~~removed~~

By ~~early October~~ mid-October 2026, discussions regarding the 2027 Budget Law have incorporated new proposals alongside growing economic concerns. To support younger workers, officials are considering a 5% flat tax on salary increases for those under 35. Additionally, a 21% flat tax for commercial rentals is being weighed to assist local businesses. While previous discussions focused on expanding the 33% IRPEF bracket to incomes of 60,000 euros, Finance Minister Giancarlo Giorgetti has advised caution due to high debt interest costs and limited deficit margins. However, the Alleanza Verdi Sinistra (AVS) has introduced a ‘Fiscal Restitution’ reform proposal. This plan aims to reduce IRPEF taxes for 98% of taxpayers earning under 90,000 euros annually through a progressive structure. The AVS suggests funding this via a wealth tax on individuals with net assets exceeding 5.4 million euros—estimated to generate 15 billion euros—and 7 billion euros from enhanced anti-tax evasion measures. Recent developments from the Public Finance Programmatic Document (Dpfp) highlight significant fiscal constraints, noting a national debt exceeding 3,000 billion euros and the country’s failure to exit the excessive deficit procedure. Proposed measures requiring funding now include housing bonuses and the abolition of the car tax. ~~Efforts~~ As of October 12, 2026, the government is exploring potential voluntary contributions from banks, insurance companies, and energy firms to ~~secure additional revenue face obstacles;~~ fund the budget maneuver. While Antonio Patuelli, president of the Italian Banking Association (Abi), previously stated ~~that~~ banks ~~will~~ would not provide a new voluntary contribution to fund the budget. Furthermore, the possibility of a windfall tax on energy companies has been sidelined following voluntary price reductions by firms such as Eni. Regarding pensions, projections for 2027 suggest contribution, Minister Giorgetti is now considering an ~~inflation-based adjustment~~ initial hypothesis of ~~approximately 2.9%. Complementing this, a report by Deloitte~~ between 2 and ~~Mefop noted that Italian pension fund assets grew by 4.3% in the first half of 2026, reaching 273.2~~ 3 billion euros. Deputy Prime Minister Matteo Salvini has suggested a more ambitious target of at least 5 billion euros, noting that banking profits are expected to reach approximately 50 billion euros this year. Salvini emphasized these contributions should be “spontaneous and agreed upon” rather than forced through aggressive legislation.

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