Draft Budget Bill

Here is the 26-billion budget: from tax measures to the bank levy and the pension cuts

The draft budget bill contains 157 articles: an 850 million fund for early retirement, a maternity bonus for nearly one million female workers, and a 300-euro voucher for the over-75s. Over 5 billion from the financial sector in 2027; the Tobin tax is set to double

by Lorenzo Pace

30 October 2026

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4' min read

Translated by AI

Versione italiana

4' min read

Translated by AI

Versione italiana

One hundred and fifty-seven articles for a budget package totalling around 26 billion in 2027, of which around 9 are intended to extend measures due to expire at the end of 2026. This is the 2027–2029 Budget Bill, which has been approved by the State General Accounting Office, and which shifts the burden of funding primarily onto banks, insurance companies and the energy sector. Let us look at some of the measures set out in the text, which will begin its passage through Parliament in the Chamber of Deputies.

Tax authorities

For 2027, the second IRPEF tax band, at 33 per cent, will apply to incomes of up to 55,000 euros rather than up to 50,000: according to the technical report, this affects around 3.2 million taxpayers and will cost 1.43 billion. Turning to young people under 30 – that is, those born after 1997 – those with incomes of up to 28,000 euros will pay a 1 per cent tax on salary increases, up to 2,500 euros, at a cost of around 400 million in IRPEF.

Pay rises resulting from contract renewals paid in 2027 are taxed at 5 per cent for private-sector employees with incomes of up to 33,000 euros. In the public sector, supplementary pay is taxed at 15 per cent on amounts up to 800 euros. From 2027, there will be no road tax on one petrol or diesel car per person with an engine power of up to 80 kW: the regions will receive €2.29 billion in compensation. The flat-rate scheme is extended to include income of up to €100,000.

Work and pensions

A fund totalling 850 million per year will be established from 2027 to 2029 to finance future early retirement measures, to be set out in a subsequent law. The ‘Ape sociale’ scheme and the bonus for those who defer their retirement have been extended by one year.

Then there is the issue of pension indexation (i.e. linking pensions to inflation), which remains at the full rate up to four times the INPS minimum and decreases in stages down to 32 per cent above ten times the minimum.

People aged 75 and over with pensions of up to 28,000 euros will receive a 300-euro card for healthcare expenses, funded by a 1.6 billion euro fund.

For civil servants, the waiting period for the TFS is being gradually reduced: from nine to six months in 2028, three months in 2029, and no waiting period from 2030 onwards for those leaving due to reaching the age limit.

Family

Working mothers with at least two children and an income of up to 40,000 euros receive 100 euros a month: the estimated number of beneficiaries is around 993,000 women, amounting to 1.07 billion a year.

The number of months of parental leave paid at 80 per cent is increasing from three to four, and companies that hire mothers will be able to deduct an additional 80 per cent of the cost.

For every newborn, the State will pay 100 euros a year, until the child reaches the age of 18, into an account held with the INPS.

Healthcare and education

The health fund will increase by 2.37 billion in 2027. This includes 500 million a year for hospital admission fees, 300 million for additional services to tackle waiting lists, and 380 million for A&E allowances.

The voucher worth up to 1,500 euros for state-recognised private schools has been confirmed at 20 million, and publishers will have to sell textbooks in a printable digital format at half price.

Business and energy

The tax credit for the Single Special Economic Zone (ZES) will rise to 2.4 billion in 2027. SMEs that are not energy-intensive will receive a discount on electricity of up to 50 per cent of the wholesale price, amounting to 1 billion in 2027, provided they reinvest it in the energy transition. Exemptions for permanent recruitment are extended until the end of 2027.

Accounts for banks and insurance companies

Let’s move on to insurance premiums. Banks and insurance companies bear the heaviest burden. The IRES surcharge rises by 3 percentage points in 2027 and 2028 (783.7 million in the first year), the IRAP deductibility of administrative expenses and depreciation falls from 90 per cent to 30 per cent (1.33 billion in 2027), and the new schedule for deducting DTA will amount to 2.07 billion in 2027, part of which will be refunded over the following two years. The tax on mathematical reserves in the life insurance sector rises to 1.285 per cent. The Tobin tax doubles, from 0.4 per cent to 0.8 per cent, amounting to 1.38 billion per year.

Energy companies

Energy companies will face a 5-point net increase in IRAP in 2027 (3 points more than the increase already provided for in February’s ‘Bollette’ decree) and a 3 per cent rise in the surcharge over the following two years.

Gaming, tobacconists and government departments are involved

The tax rate on gaming rises by one percentage point, to 25 per cent for slot machines and 9.6 per cent for video lotteries, whilst licences for betting, bingo and scratch cards are extended until 2029, subject to a fee: for instant lotteries, the licence holder will pay 188 million in 2027.

Bringing forward the tobacco price rises to July is worth 112 million. From 2028, the withholding tax on payments between businesses will double, rising to 1 per cent and then to 2 per cent from 2029. Then there is the exit tax: anyone who transfers their residence abroad whilst holding financial investments worth at least 800,000 euros will pay tax on any capital gains realised.

The picture is rounded off by cuts to ministerial budgets and the 60 million a year paid by Palazzo Chigi.

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