European Commission
Vice-President Valdis Dombrovskis said Wednesday that some of
the tax-cutting measures contained in the government's 2016
budget bill are not in line with EU recommendations.
"Some of the actions adopted at the fiscal policy level" by
Italy "are not in line with the general recommendations" of the
EU.
Premier Matteo Renzi's government plans to abolish the IMU
property tax and the property-based TASI tax on people's primary
residences.
The EC has repeatedly said it does not like the
property-tax cuts in the 2016 budget bill, reminding Renzi that
its standard recommendations to member States go in quite the
opposition direction - to shift the burden from labour and
consumption onto property among other things.
The elimination of property tax IMU and property-related
service tax TASI has also come in for criticism from the
domestic opposition, which argues it is unfair to slash taxes on
all residences, including castles and luxury villas whose owners
can well afford to pay.
Renzi has retorted by saying his government, unlike
previous centre-left ones, is out to ease poverty but not at the
expense of targeting rich wealth creators.
However, he appeared to retract this in later comments when
he said that castle owners would have to pay taxes.
Dombrovskis added that the Commission was "assessing"
Rome's request for greater budget flexibility due to the cost of
the refugee crisis.
The draft budget the government has sent to Brussels puts
current spending on the migrant emergency at three billion
euros, with a total cost of 3.3 billion euros.
Of these, 50% is spent on hosting the asylum seekers and
20-30% is spent on rescuing them at sea. Italy is requesting
deficit flexibility based on these numbers.
The budget currently amounts to 27 billion euros but this
may rise to 30 billion if the EU OKs a clause on the migrant
emergency, allowing Italy to raise the budget-to-deficit ratio
from 2.2% to 2.4% - equivalent to just over three billion euros.
Renzi recently said that, if the EC asked for revisions to
his executive's budget, Rome would send it back to Brussels
unchanged.
This week European sources said the Commission will likely
not send Italy's budget bill back for revision. The climate
after a first EC reading of the proposed budget is "positive" as
Italy is said to be "more solid" than last year.
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