the deductions for employees arrive – Corriere.it

Deductions of expenses made to be able to work also for employees. Rationalization of the number and extent of value added tax (VAT) rates. Rewriting of excise duties on energy products and electricity so as to take into account the environmental impact of each product, ie favoring energy and green fuels.

These are some of the novelties that peep into the draft of the text of the law enabling the government for the tax reform, on the table of the Council of Ministers tomorrow. What also stands out is the fact that the transition from four to three brackets of personal income tax (Irpef), which the Ministry of the Economy is clearly thinking of, is not expressly mentioned in 18 articles and thirty pages. In its place we speak of a transition of the system towards the single tax rate which, in words, has every appearance of being the proclamation of the flat tax on personal income as the (theoretical) objective of tax reform. But here are some of the passages from the draft of the delegation, waiting to see if it will be confirmed and approved by the government.

A surprise of the delegation certainly in article 5, paragraph 2.2: The possibility of allowing the deduction from income from employment and assimilated work, even on a lump sum basis, of the expenses incurred for the production of the same. In short, an employee or a worker should be able to deduct from their taxable income tax, for examplethe cost in public or private transport to get to work. In the income on which deductions, deductions or benefits can be applied for any reason those subject to substitute taxes are also counted. In essence, those who enjoy the tax discounts of the dry coupon on rents will be able to add other benefits to them.

The fact also stands out that, in fact, there is no mention of the objective of the three personal income tax rates. Instead, we propose the revision and gradual reduction of personal income tax, in compliance with the principle of progressiveness and with a view to transitioning the system towards the single tax rate. In short, an Irpef made in the form of a flat tax, at least as a flag. Below (article 5 paragraph 2.1) the objective is implicitly confirmed when it comes to the progressive application of the same Irpef tax burden, regardless of the nature of the income produced: that is, valid for self-employed workers as for employees. The impression that a difficult confrontation is underway in the government on this point, with the League trying to save the banner of the flat tax. On the contrary Maurizio Leo, the deputy minister of the Economy of Fratelli d’Italia who oversaw the delegation, seems concentrated on the three income tax brackets.

Mention is also made of a substitute Irpef tax on all incremental income higher than the highest one of one of the previous three years. And also a special scheme for employees that facilitates the increase in income of one year compared to the previous year. In essence, in the delegation the incremental flat tax alive and well. On the other hand, no tax incentive for labor productivity has been indicated, a forty-year-old real evil of the Italian economy. All of this would of course cost a lot or a lot, depending on how you do it.

But with regard to coverage, the delegation it limits itself to indicating an intervention on the jungle of 720 tax relief measures with which the system is riddled. Without too many details, except to safeguard the family and its expenses. We are talking about the reorganization of deductions, deductions and tax credits with particular regard to the family nucleus, the protection of the home asset and that of people’s health, education, supplementary pensions, as well as the objectives of improving the energy efficiency and seismic risk of the existing building stock. In short, even the home bonuses seem to be safe from cuts.

There are also few details on how the corporate income tax (IRES) will change. Here we only speak of a reduction of the tax rate in the event of employment in investments, with particular reference to qualified ones, and in new hires, of a sum corresponding, in whole or in part, to income within the two subsequent tax periods. In essence, you are tax deducted immediately if you undertake to make investments or hire in the next two years. For the types of machinery or the categories of workers to be incentivized are not specified. It is not clear what happens if, perhaps due to a change in the economic situation, the company stops its spending plans. The measure pushes in the (right) direction of having more investments, but here too the cost to the exchequer can be high. The draft then speaks of remodulating excise duties to take account of the environmental impact and promoting the use of biomass or renewable energy products. Who pollutes less, pays less (or vice versa).