Rome Times

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Tuesday, Feb 25, 2025

Italy's Fiscal Peace Initiative: Reforming Tax Collection and Economic Growth

Italy's Fiscal Peace Initiative: Reforming Tax Collection and Economic Growth

The Italian government's proposals aim to address outstanding tax liabilities while promoting sustainable economic growth.
In recent discussions surrounding Italy's fiscal policies, the government has proposed the 'fiscal peace' initiative as part of a broader strategy to manage outstanding tax liabilities.

This initiative includes provisions for the 'rotta-mation' of tax collection in an effort to relieve financial burdens on citizens and businesses.

Andrea de Bertoldi, a member of the Lega party, emphasized the necessity of these measures in a comprehensive interview.

De Bertoldi clarified that the rotta-mation is not a tax amnesty; instead, it represents a mechanism to convert uncollectible tax credits into liquid assets for the state.

This would theoretically allow the government to recover funds that would otherwise remain unrecoverable, providing considerable support to many businesses at risk of failure.

This approach is viewed as essential for safeguarding jobs and stabilizing household incomes.

One of the primary challenges identified in the implementation of a true fiscal reform is the limitation of financial resources.

Effective reform is expected to reduce overall taxation, thereby stimulating GDP growth.

However, concerns over public expenditure mismanagement have raised questions about the availability of necessary financial backing.

De Bertoldi pointed to ongoing inefficiencies, such as those associated with the superbonus scheme, which complicate budgetary allocations.

A further complication arises from the State Audit Office's refusal to acknowledge 'fiscal retroactions' as a valid financial model.

The notion that reducing taxes could lead to increased consumer spending and consequently higher fiscal revenues remains a contentious topic.

De Bertoldi advocated for the 'fiscal peace' framework, arguing against penalizing citizens who have inadvertently fallen behind on their tax obligations.

He noted that provisions have been made to reopen applications for the fourth round of rotta-mation, allowing eligible taxpayers to submit new requests by April 30. The initiative also includes legislative efforts in both the Senate and the Chamber of Deputies to allow installment payments for outstanding debts spanning up to ten years.

De Bertoldi believes this aligns with European directives and will aid in making the tax system more approachable for citizens.

In addition to the rotta-mation, De Bertoldi highlighted the urgency of reducing taxation on the pension funds of self-employed professionals.

This particular proposal, which aims to decrease the current tax rate from 26% to 20%, has the potential to positively impact both economic growth and the welfare of fund beneficiaries, provided funds are directed toward investments in the Italian economy.

Overall, the introduction of such measures illustrates the Italian government's ongoing efforts to revamp its fiscal policy framework and address long-standing economic challenges while aiming to enhance financial stability for both families and the broader economy.
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