2027 Budget, proposals for young people: flat tax, tax incentives, academic merit-based income

Ahead of the 2027 Budget, there are already numerous proposals on the table. Among the hottest topics are incentives for young people, aimed at valuing their work and stemming the brain drain of talent that leaves the country every year. Whilst, on the one hand, the Minister for the Economy Giancarlo Giorgetti has raised the possibility of preferential tax treatment for pay rises, on the other hand, Stefania Craxi, leader of the Forza Italia group in the Senate, has proposed a reduction in personal income tax (IRPEF) for under-30s and the introduction of a merit-based income scheme.

As the Minister for Labour Marina Calderone pointed out, ‘the ability to offer young people employment and opportunities for professional development is fundamental, as is the ability to attract and bring back to Italia skills acquired abroad. These are essential conditions for the country’s future competitiveness’. According to Calderone, therefore, it is necessary to ‘ensure that an increasing number of qualified young people can build their future in Italia’ and for this reason ‘as part of the 2027 Budget Act, in addition to renewing our commitment to tax relief, contractual pay rises and incentive schemes, we will also introduce specific measures to support young people, those returning to Italy, and their incomes’.

Giorgetti’s proposal to introduce a flat tax for young people on pay rises is precisely along these lines: ‘It is abundantly clear that, when entering the world of work, young people’s wages are too low. I believe we need to put forward a proposal for a tax incentive, which goes hand in hand with a willingness on the part of employers and business owners to offer more appropriate pay,” he stated whilst speaking at the Lega event “In your defence – towards the 2027 Budget Law”.

“In the latest Budget Bill, we successfully implemented a policy of this kind, whereby we applied a 5 per cent flat tax rate to everyone renewing their employment contracts,” explained the Minister for the Economy and Finance. “In my view,” the minister continued during the programme ‘A tua difesa’ – ‘something similar could be done through an agreement between business owners and employers who invest in young people – thereby increasing their salaries – and on these salary increases the state could apply a preferential tax rate, a sort of flat tax’.”

The chair of the Forza Italia senators, Stefania Craxi, has announced that in “Libera Italia”, the package of growth measures devised by the party, a great deal of attention will be focused specifically on young people, with two draft bills to be presented at Azzurra Libertà, the national festival of Forza Italia Youth, to be held between 11 and 13 September: one will focus on abolishing personal income tax for under-30s, and the other on a ‘merit-based income’, a financial grant for students who achieve excellent academic results.