Last night (15th), the Cabinet of the Italy Government adopted the draft budget law for 2025. The draft text will be submitted to Parliament for consideration, and final approval is expected by 31 December. According to Italy's Fanpage and Tgcom24 reports, the Italy government has given clear instructions on several measures: confirming tax cuts and personal income tax; There are few new changes in pensions; introduction of a €1,000 "Newborn Card"; around 3 billion euros for public health care systems; Banks and insurance companies are expected to provide a "contribution" of 3.5 billion euros. The Ministry of Economy and Finance of Italy announced that the total cost of the entire budget is about 30 billion euros.
The picture shows Italy's Minister of Economy and Finance, Giorgetti · cutting the tax wedge
The tax wedge cut is the most costly measure in the budget and one of the most important policies for the Meloni government. From next year, the tax wedge cut will be a long-term policy, not just a measure that needs to be reconfirmed every year. This policy does not directly affect the employee's salary, but if it is not confirmed, the salary can be reduced by almost 100 euros per month in many cases. The reduction in the tax wedge is still aimed at taxpayers whose annual income does not exceed 35,000 euros. The Ministry of Economy and Finance has not yet clarified whether it will set up a mechanism to gradually expand the cuts to groups with annual incomes of up to 40,000 euros, thus eliminating the current "step effect" caused by incomes slightly exceeding the 35,000 euro threshold. · Personal income tax
The government will make the three-tier tax rate structure of personal income tax a long-term policy, which is still a temporary measure for now. There are three levels of personal income tax: 23% for income up to 28,000 euros; 35% for €28,000 to €50,000; The tax rate is 43% for more than €50,000. It is unclear whether the government will introduce amendments into the bill, such as lowering the mid-bracket tax rate, or extending its scope to 60,000 euros. Relevant amendments may appear during parliamentary deliberations. · pensions
Pensions have long been seen as "victims" in this budget, and this is exactly what happened. The method of early retirement remains the same as this year, and the conditions are not ideal. The only measure announced by the government is to strengthen incentives for "public and private sector employees who have reached retirement age but continue to work", allowing them to continue working after reaching a certain age and receive slightly higher wages. Public officials may have the option to work until the age of 70. However, the increase in the minimum pension amount is not mentioned. The issue is likely to be discussed in Parliament, but given limited resources, the monthly increase is expected to be only a few tens of euros. · 1,000 euros for newborn cards
The budget bill includes a "newborn card" that provides a subsidy of €1,000 for families with a newborn child with an annual comprehensive household income (Isee) of less than €40,000 to help cover the various initial expenses of the newborn. The specifics will be determined in parliamentary discussions. Parental leave will be "recognized and strengthened", but the exact content is not yet clear. In addition, there may be a change in the way the family's Isee is calculated: the funds received through the "Unified Allowance" are no longer included in the calculation of the family's comprehensive annual income. This will allow the beneficiaries of the "Unified Allowance" to have a lower combined annual income, making it easier to access other benefits, such as kindergarten subsidies·. Customize the "shopping card" for you
The Meloni government's Dedicata a te (Dedicata a te) shopping card, which has been piloted, will continue to be issued in 2025. It is a card worth 500 euros that can be used to buy food, fuel, and monthly passes for public transport, among other things. It is not yet known whether the amount of the card will remain the same, but the total funds available are 500 million euros. If the card amount is still 500 euros, there are about 1 million beneficiaries. More information will be clarified after the government issues a decree. · Banks and insurance companies contribute more money
After weeks of negotiations, Meloni's government reached an agreement with banks and insurance companies to provide a "contribution" to the country's finances. There is still not much information about it. Italy's Minister of Infrastructure and Transport and Deputy Prime Minister Salvini said the estimated value of the "contribution" was 3.5 billion euros and that the funds would be used mainly for health care. On the other hand, Foreign Minister and Deputy Prime Minister Tajani stressed that this is not a new tax, but "an agreement with financial institutions to provide the country with a solution for liquidity." "According to some speculation, this may involve paying DTA (deferred income tax) in advance, but it still needs further confirmation from the government. · The more children, the more tax deductions
Another measure that has been announced, but the details are not yet known, is the "family quota", which aims to reward families with multiple children. When calculating the tax deduction for each taxpayer, the number of people in the household will be "taken into account." This means that taxpayers with more children or families can get more tax relief.
The text of the draft budget law will be submitted to Parliament for consideration, and final approval will be completed by 31 December, at which time changes may be made to the draft proposed by the Government.
(Original by Yiyi, translation: Sasha, editor: Shuliao, image source: Italy Prime Minister's Office website, please indicate Yiyi: oushitalia)