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Italy can't use EU funding to cut labour taxes, commissioner

Cohesion fund for new development plans, says Johannes Hahn

07 March, 13:31
Italy can't use EU funding to cut labour taxes, commissioner (ANSA) - Brussels, March 7 - Italy cannot use EU funding to lower its tax burden, EU Commissioner for Regional Policy Johannes Hahn said Friday through a spokesperson.

"The EU clarifies that cohesion policy funds must be used for new development projects", said the spokesperson.

"They cannot therefore be used to cover tax cuts, like cuts potentially connected to the tax wedge, as suggested by some observers".

Italian Premier Matteo Renzi on Thursday said his government's priority is "jobs and growth, growth and jobs" as Italy is slowly beginning to come out of its worst recession since Second World War.

Renzi has vowed to cut payroll taxes by a double-digit figure (in millions of euros) by the first semester of this year.

The tax wedge is the difference between what a firm pays each worker and the worker's net salary.

The Organisation for Economic Co-operation and Development (OECD) estimated it at 47.6% in Italy in 2012, the sixth-highest among the organisation's 34 member countries.

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