A European Union report on Monday suggested Italy shift taxes from labour to consumer spending, property and the environment. The report said that, like other EU States, Italy has "a relatively high tax burden on labour" adding that there is space to "more the fiscal burden to less distorting taxes, like those on consumption, on recurrent taxes on property and those on the environment".
The report added that, while taxes on sales of property were high in Italy, annual taxes on property ownership were relatively low.
Italy's high labour taxes have been blamed for contributing to relatively low net salaries and high unemployment.
Premier Matteo Renzi's government, however, has pledged to abolish the IMU property tax and the TASI local-services tax. The report recommended that Italy reduces exemptions as part of efforts to reduce a high VAT gap - the difference between the amount of VAT collected and the VAT Total Tax Liability. It said that Italy had a "VAT gap significantly higher than the EU average". The report added that there is room to "improve the efficiency of the VAT system by limiting the use of lower tax rates and non-obligatory exemptions".
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