untitled design

Italy is throwing a new package of 14.3 billion euros into the fight against inflation

Italy plans to approve a new aid package of about 14.3 billion euros on Thursday to help shield businesses and families from rising energy costs and inflation, government officials said, according to Reuters.

The scheme, one of outgoing Prime Minister Mario Draghi’s last major acts before next month’s national election, comes on top of some 33 billion euros given since January to ease the effects of sky-high electricity costs. natural gas and gasoline.

A draft decree seen by Reuters showed Rome planned to extend until the fourth quarter of this year existing measures aimed at reducing electricity and gas bills for low-income families, as well as reducing so-called “cost systemic”.

The levies, designed to help finance initiatives ranging from solar power subsidies to nuclear decommissioning, typically accounted for more than 20% of Italy’s energy bills before the government took action.

Among a series of measures, the government will extend the 200-euro allowance paid in July to low- and middle-income Italians to workers who did not receive it previously.

The reduction in excise duty on fuel which was scheduled to expire on August 21st is to be extended until September 20th.

Rome is also considering preventing energy companies from making unilateral changes to electricity and gas supply contracts for households until October, according to the plan.

With tax revenues coming in better than forecast, funding the package will not lead to an increase in the government deficit target, which Rome confirmed last week at 5.6% of national output this year.

About 1.6 billion euros will go towards reducing in the second half of this year the so-called tax wedge, the difference between the wage paid by an employer and what an employee takes home, with the benefit going to workers with an annual income of less than 35,000 euros.

The Organization for Economic Co-operation and Development (OECD) estimated that in 2021 the average single worker in Italy lost 46.5% of their gross salary in taxes and social security contributions, the fifth highest rate among a group of 38 advanced countries.

To support the purchasing power of the elderly, the government will accelerate to the fourth quarter of 2022 the 2% pension adjustment planned for 2023, at a cost to the state coffers of around 2.4 billion euros.

Source: Capital

You may also like

Most popular