Italy's industrial employers confederation Confindustria on Wednesday called on the government to cut income taxes to boost flagging demand in recession-hit Italy.
"It's certainly necessary to work to take taxes off salaries to stumulate consumer spending and return to growth," Confindustria Giorgio Squinzi told Mediaset television before a meeting between business associations and Premier Mario Monti later in the day.
"Stimulating domestic spending is the most direct way to boost growth. The decline in Italian industrial output is mainly linked to the fall in domestic consumption, which is due in particular to taxes".
Squinzi added that a "boiling hot autumn" of tension had already begun because of the economic crisis and bemoaned the lack of a "clear industrial policy". Monti's emergency government of non-political technocrats introduced a number of tax hikes in its December austerity package designed to put Italy's public finances back in order. The Bank of Italy has said the tax burden in Italy is now unsustainable in the long term, but the government has ruled out tax cuts in the near future.