Tax breaks for the middle class, with automatic benefits for higher incomes as well, support for divorced couples, a reduced increase in the retirement age, and a push for supplementary pensions. But there will also be tax increases on cigarettes, diesel fuel (offset by the decline in gasoline prices), and car insurance. The final approved budget, originally costing €18 billion and now over €22 billion, brings with it a long list of changes. Some of these have sparked heated political debate, especially within the majority. The first stumbling blocks were the banks' contribution, short-term rentals, and the taxation of dividends. Then came gold, and finally pensions. Here is a summary of the main changes.
INCOME TAX DISCOUNT AND BENEFITS - The highlight is the IRPEF reduction for incomes up to €50,000, with the second rate dropping from 35% to 33%. A reduced 5% tax rate is applied to contractual increases, valid for incomes up to €33,000 and for contracts renewed from 2024 to 2026. The substitute tax rate for performance bonuses and profit-sharing schemes up to €5,000 is reduced to 1%. The tax-free threshold for meal vouchers is increased from €8 to €10.
PENSIONS - While the government initially focused on personal income tax (IRPEF), the majority has instead devoted all its efforts to the grand finale of pensions. The retirement age will rise by one month instead of three in 2027, then by three months in 2028. Resources for early retirement for early and arduous workers are being reduced, and the "Women's Option" (Opzione Donna) is being abolished, its extension even being rejected as an agenda item. Inflation adjustments are coming, but only for the lowest pensions. For young new hires, automatic enrollment in supplementary pension plans will come into effect starting July: they will have 60 days to decide otherwise.
BUSINESS INCENTIVES - The hyper-depreciation for investments in capital goods has been extended until September 30, 2028. The measure is increased by 180% for investments up to €2.5 million, by 100% for investments between €2.5 million and €10 million, and by 50% for investments between €10 million and €20 million for investments in goods produced in the EU. Resources are also available for the Transition 5.0 tax credit (€1.3 billion) and the ZES (€532.64 million). The New Sabatini Law has also been refinanced.
