Italy local taxes up 22 percent in three years

03 Aug, 2015

Taxes levied by Italian cities jumped an average of 22 percent in three years as local authorities tried to offset cuts in spending by the central government as it tackles the budget deficit, the country's accounting watchdog said.
On average, Italians paid 618.40 euros ($679) per capita in local taxes in 2014, up from 505.50 euros in 2011, the court of accounts said in a study on its website dated July 27 but only reported on Sunday by Italian media.
Local administrations have collected 8 billion euros more in taxes since 2011 as the central government reduced expenditure to cities by about 5 billion euros.
"Very substantial increases in fiscal pressure are due to the necessity of maintaining some balance (in local government budgets) after the severe corrective measures adopted by the central government," the court said.
People living in cities with a population of more than 249,000 paid more than the average, while smaller towns paid less. Local taxes are usually used to pay for services such as garbage collection, transport and road repairs.
Italy has been through several years of belt-tightening in response to the 2011 euro zone debt crisis, and because of its need to cut its huge debt, worth more than 130 percent of national output.
The austerity has hurt growth and Italy, the euro zone's third-biggest economy, is only now recovering after a three-year slump. To help fuel growth, Prime Minister Matteo Renzi last month announced plans to slash taxes by about 35 billion euros over the next three years.
His pledge to eliminate a much-hated housing tax next year, however, has many mayors concerned because it would eliminate a primary source of tax revenue for local administrations.
Renzi has responded to concerns by saying he will overhaul the country's fiscal system and make sure that local governments are not affected by the abolition of the property tax.

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