Italy is set to have a tax-to-GDP
ratio of 41.8 in 2019, the same as this year, according to the
tables in the draft budgetary plan that the government has sent
to the European Commission.
A review of public spending will generate 3.6 billion euros
in 2019, including 2.5 billion from cuts to ministry budgets,
according to the plan.
Over four billion euros in revenue is set to come from
Italy's banking and insurance sectors.
Italy's deficit-to-GDP ratio will rise to 2.4% in an
expansive budget that the government says will have a positive
impact on growth, thus helping to bring down the debt-to-GDP
ratio too.
The deficit is above the target of 0.8% of GDP agreed with
the Commission by the previous centre-left government.
The budget will introduce a 'citizenship wage' basic income
for job seekers and an overhaul of the pension system bringing
down the retirement age.
It will also kick off a reform of the tax system to gradually
bring in a two-tier flat tax.
The government said it wants the Commission to grant it
flexibility on the application of the EU budget rules for
infrastructure spending, above all following the Morandi
bridge-collapse disaster in Genoa in August in which 43 people
died.
"The budget plan include expenditures of an exceptional
nature for about 0.05 per cent of GDP for the next year," it
said.
"The collapse of the Morandi bridge in Genoa highlighted the
need to undertake an extraordinary maintenance program for the
road network and connections.
"Considering the exceptional and urgent characteristics of
the planned interventions, the Government asks the European
Commission to recognize budget flexibility for these purposes".
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