Towards the budget law

From the Irpef cut to the premium IRES, the manoeuvre in search of resources

On the one hand, there is the need to keep the public accounts in order, with the idea of anticipating the descent below the 3% deficit as early as 2026 by getting out of the EU infringement procedure. On the other there are the targets to reduce the Irpef tax from 35 to 33% also for average incomes up to 60,000 euro and the sterilisation of the additional three months of extension of the retirement age.

by Rome Editorial Staff

19 August 2025

close up view of F24 form for italian taxes,the word irpef and an electronic calculator (3d render)

3' min read

3' min read

The manoeuvre work site is ready to start after the summer break on the strength of a good trend in tax and social security revenues, which in the first six months alone, according to the State Accounting Department, saw a growth of almost 34 billion, 12.5 of which for social security payments. Irpef showed a positive sign, particularly for income tax payments that grew by 34.4% (895 million), but also IRES (+9.08 billion) and VAT (+2 billion).

On the one hand, there is the need to keep the public accounts in order, with the idea of anticipating the descent below the 3% deficit as early as 2026 by getting out of the EU infringement procedure. On the other there are the targets to reduce the Irpef tax from 35 to 33% also for average incomes up to 60,000 euro and the sterilisation of the additional three months of extension of the retirement age.

Spreads falling

The work on the manoeuvre then starts with another certainty. The markets are looking calmly at the Italian public budget, so much so that the spread between Italy and France has now almost disappeared. Three years ago it was worth 200 points on ten-year bonds, now it has even dropped below 10 points, marking the lowest level since 2005. And lower interest rates translate into more resources to be used. But the improvement in the Italian spread also concerns other countries: for the Btp-Bund, for example, it is below 80 basis points. This is a sign of the confidence of the markets, which - Economy Minister Giancarlo Giorgetti is well aware of this - are watching the budget manoeuvre closely.

The Irpef cut for the middle classes

At the top of the list of measures to be taken is the tax chapter. And in the lead is an extension of the intervention on the Irpef rates that this time should touch the bracket that starts from 28 thousand euro and goes up to 50 thousand euro, extending it even up to 60 thousand euro: the idea is to reduce the levy from 35 to 33%. The cost of the intervention is around EUR 4 billion but would give an annual benefit worth EUR 440 for incomes up to EUR 50 thousand.

League Prioritisation

Also on the table is the five-year tax amnesty, which was strongly supported by the League. "I think it should not be a priority of the League to definitively scrap tax bills, but of the entire government. I have spoken with Minister Giorgetti about it and I am convinced that we will bring it home,' said Deputy Prime Minister and Infrastructure Minister Matteo Salvini on Tuesday, 19 August, when asked about the tax amnesty ahead of the manoeuvre. 'Fiscal peace means freeing millions of Italian workers from a seizure of these tax bills that have multiplied in the meantime,' he added.

Hunting for resources for the premium IRES

Resources are also being sought to stabilise, not without adjustments, the bonus IRES envisaged for companies that have their accounts in order and that hire. The health chapter, which has been a source of political battle, especially from the opposition, will certainly be financed. Health Minister Oreste Schillaci already announced at the end of the meeting before the summer break, which served to kick-start the manoeuvre, that he had obtained an extra two billion.

The pensions chapter

Then there are pensions. The increase in life expectancy predicted by Istat will trigger an additional three months in 2027 before one can retire in old age. The exit age is expected to increase from 67 years to 67 years and three months, based on the automatic mechanisms of the Fornero Law. But Minister Giorgetti has assured that this increase will be sterilised. A choice that could also take place with a different measure from the manoeuvre. Recently the undersecretary of Labour, the Lega Nord member Claudio Durigon, explained that resources will certainly be found to block this increase, even if the cancellation of the rule could only come in 2029, when the retirement age is expected to increase by a further two months. First, however, it will be necessary to carefully assess the impact, which some estimates put at 300 million, while others predict a much higher cost.