Bank of Italy says property tax cuts will only give economic boost if seen as permanent

(ANSA) - Rome, September 29 - Luigi Federico Signorini, the deputy director of the Bank of Italy, said Tuesday that the government's plans to cut property taxes will only provide a boost for the economy if taxpayers are confident the move is permanent. Premier Matteo Renzi has pledged to abolish property tax IMU and local-services tax TASI on people's primary homes in the 2016 budget. "Household consumption could benefit (from cuts on taxes on primary homes) but it depends on the degree to which these are perceived as permanent," Signorini told a parliamentary hearing on the government's economic blueprint, the economic and financial document (DEF).
    He added that Renzi's plans were the "fifth intervention in the last seven years" on property taxes. On Monday a European Union report suggested Italy move in a different direction and 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 "move 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 real-estate ownership were relatively low. Italy's high labour taxes have been blamed for contributing to relatively low net salaries and high unemployment. The report prompted an irate response from Renzi.
    "We decide which taxes to cut, not eurobureaucrats in Brussels," he said in New York, where he is set to address the United Nations General Assembly on Tuesday.
    "The EU's job is not to put its oar in on a State's ultimate choices. It must not make decisions in place of single governments".