Wednesday, 10 October 2012 15:11
MILAN: Italy's value added sales tax (VAT) is set to rise by one point while tax on low incomes will drop, according to a draft bill aimed at reducing debt and helping protect the poorest in the recession-hit country.
The so-called "Stability Law", adopted by law-makers late on Tuesday after an eight-hour long debate, lays out budgetary measures for 2013 to 2015.
The government, which had previously said it wanted a two-point VAT rise from mid-2013, finally settled on a one-point rise to a maximum of 22 percent.
The bill also aims to give breathing space to people on lower incomes, who have been hit hard by severe austerity measures aimed at tackling the country's vast debt of 1.9 trillion euros ($2.4 billion) and staving off the debt crisis.
The government said it intended "to introduce an important element of equity by revising income tax and helping families on the lowest incomes to consume."