A bill proposed by the Italian government would put nearly nine billion additional euros in government coffers in 2013, the Italian daily Il Messaggero reported on Monday, citing a technical assessment of the bill. The measure, which is called the 'Stability Law', would increase the VAT tax for an additional four billion euros a year. The introduction of a tax on financial investment transactions, known as the Tobin Tax, is predicted to bring in 1.1 billion euros. The Tobin Tax is also expected to reduce the volume of stock and derivatives transactions by 30% and 80% respectively.
In addition, the law would save 49.8 million euros by narrowing permits given to public employees who care for disabled relatives, the report said. But that measure could change, according to the report, as could other controversial provisions, according to government sources.
The government is deliberating whether to modify a part of the bill which would retroactively reduce tax deductions, making it necessary for taxpayers or tax-paying entities to cough up payments on past filings, government sources said. Another possible change concerns narrowing payments to public employees who care for disabled relatives, the sources added. The latter measure, if enacted, would lead to roughly 50 million euros in spending cuts. The savings would only be a fraction of what the government stands to lose in proposed cuts to Italy's value added tax (VAT). A proposal to halve a planned VAT increase in 2013 would mean forgoing 3.28 billion euros in revenues, according to the report. The bill calls for increasing the VAT by 1% rather than 2%. The VAT is currently 21% on most sales. Italian Premier Mario Monti has stressed that the budget measures contained in the so-called Stability Law do not amount to another austerity package like the tax hikes and spending cuts his emergency government passed last year to put Italy on course to balancing its budget in structural terms next year.
But they still feature new cuts, including a reduction of over one billion euros In health spending.