Changes to tax rates and the flat tax could lead to chaos over local surcharges

The new tax measures in the budget are beginning to cause concern amongst local authorities due to their impact on supplementary IRPEF rates. The structure of regional and municipal supplementary rates may vary, though they must follow the national tax brackets. The increase in the income threshold to 55,000 euros, above which the highest rate applies, therefore affects the finances of the regions and the many local authorities that have opted for this approach. The extension of the flat tax scheme is also continuing. Technically, these are ‘substitute’ taxes, as they replace personal income tax (IRPEF) and supplementary surcharges. This erodes local tax revenue. However, the budget should also bring some good news: on the table are an additional 200 million for young people living apart from their families, and greater flexibility in the use of budget surpluses.