Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure IT-2023-18/3213 – measures in Italy
Country | Italy , applies nationwide |
Time period | Temporary, 01 May 2023 – 31 December 2023 |
Context | COVID-19, Cost of Living Crisis |
Type | Legislations or other statutory regulations |
Category |
Promoting the economic, labour market and social recovery into a green future
– Increasing income in general |
Author | Alessandro Smilari (Fondazione Giacomo Brodolini) |
Measure added | 06 June 2023 (updated 19 June 2023) |
The reduction in the fiscal wedge, a key intervention of the DL 4 May 2023 n. 48 (Labour Decree), aims to reduce the high tax burden on Italian workers. According to the OECD, Italy is among the top five countries with the highest tax burden. As a way to stimulate economic growth and improve employment conditions, the Italian government approved a surplus of over €3 billion at the end of April with deviation to DEF to fund this reduction.
This measure leads to an increased net salary for wages up to €35,000 from 1 July to 31 December 2023. The reduction will result in significant cuts from two to six points for incomes up to €35,000 and from three to seven points for incomes under €25,000. The enhancement of the fiscal wedge cut will increase the net salary by €96 per month for workers with incomes up to €25,000 and €99 per month for workers with income up to €35,000.
It is important to note that this measure will only apply for a six-month period, and if no changes are made during the conversion of the decree into law, the rate will return to its current values in December 2023. This measure was introduced as part of the Labour Decree approved symbolically on 1 May 2023, but there has already discussion about extending it into 2024, which would require at least another €12 billion.
No data available
Workers | Businesses | Citizens |
---|---|---|
Applies to all workers | Does not apply to businesses | Does not apply to citizens |
Actors | Funding |
---|---|
National government
Trade unions Employers' organisations Company / Companies |
National funds
|
Social partners' role in designing the measure and form of involvement:
Trade unions | Employers' organisations | |
---|---|---|
Role | Consulted | Consulted |
Form | Any other form of consultation, institutionalised (as stable working groups or committees) or informal | Any other form of consultation, institutionalised (as stable working groups or committees) or informal |
Social partners' role in the implementation, monitoring and assessment phase:
We do not have the information about who participated in the designing of the measure.
At an event organised by CGIL, CISL, and UIL in Bologna, Maurizio Landini, General Secretary of the CGIL (Italian General Confederation of Labour), addressed the tax wedge cut and other aspects of the Meloni government's Labour Decree. During a protest against the government's labour measures, Landini expressed to Sky that making the tax cut permanent would cost over €10 billion. He criticised the current measure, which only covers six months, as insufficient, especially considering the double-digit inflation.
Citation
Eurofound (2023), Reducing the tax wedge, measure IT-2023-18/3213 (measures in Italy), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/IT-2023-18_3213.html
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