“In order to support domestic demand, which is strategic for our country’s growth”, the measures “to reduce the contribution wedge” decided by this government in 2023 must be expanded become “structural”.. Emanuele Orsini, Vice-President of Confindustria, therefore intervened during a hearing before the Finance Commission in the Chamber to comment on the Meloni government’s tax reform proposal. The wedge cut, which is only increased by 4 points for the months between July and December 2023, leads to an increase in the wage bill of between 25 and 60 euros net for those who earn up to 35,000 euros per year. From January, however, everything will go on as usual unless the government extends the measure or makes it structural.

It is estimated that stabilizing this cut would cost more than 10 billion euros a year. However, unions and the opposition have already stressed that this wage hike would be of little use for a few months unless it becomes structural. The Meloni government has already committed to this, also with the intention of exceeding the threshold of 35,000 euros. The representatives of the majority in Parliament did the same.

In the hearing, Confindustria demanded that the reduction should be structural and accompanied by “measures to reduce the tax burden on individuals”. Orsini said he “appreciated” the government’s decision to undertake a “gradual reform of the current system” in a way that was “consistent” with protecting public finances. However, there is one major caveat to the financial delegation approved by the Meloni government: “The issue of financial security for implementation remains difficult to decipher,” for which there are “unresolved issues.” I mean it’s not clear Where does the government want the money from? implement all proposed reforms.

The “Review of tax benefits” is one of the ways indicated by the government in the delegation’s text, also because “many of these measures have been introduced temporarily and exceptionally in the last three years to support taxpayers affected by the negative economic impact.” Confindustria is therefore right admitted that “there are certainly areas where rationalization would be desirable”, but that it was necessary to intervene “with the greatest attention” and without “hacking the hatchet”.

Another critical point of the tax reform is the so-called incremental flat tax “on contractual increases for employees. A system that is difficult to implement” for companies, which could instead be replaced “by strengthening performance bonus concessions”. So instead of paying less tax on salary increases stipulated in contracts, companies would get exemptions for the bonuses they give their employees for achieving certain results