No tax-to-GDP ratio drop in 2019-budget

(ANSA) - Rome, October 16 - 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".