Public Accounts

Manoeuvre 2025: towards the extension of the mothers' bonus to self-employed women

Technical discussions have begun in view of the presentation, by 20 September, of the Budget Structure Plan that has taken the place of the Nadef. From the Mef: by mid-September the text in the Council of Ministers. The budget manoeuvre for 2025 could introduce important innovations for families, including the extension of benefits for self-employed mothers. The modalities of the single allowance will be redefined and previously unused resources will be used. However, the government will face the challenge of limited resources and European rules

by Redaction Rome

27 August 2024

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4' min read

Key points

Perimeter defined by 10 September
Family, benefits also for self-employed mothers
The resource node
The new Irpef cut
Front covers, difficult to recover on tax expenditures
The road to settlement
The timing

4' min read

The manoeuvre, even before the usual 'spending list' is finalised by the majority parties, would, according to some technicians, already exceed 25 billion with the concrete possibility of becoming more robust. The picture will become clearer at the end of the month with the updated data on tax revenues and, a few days later, with the presentation of the budget structural plan, the document required by the new EU Stability Pact to be sent to Brussels by 20 September. Meanwhile, the Minister of the Economy Giancarlo Giorgetti has already resumed the technical reconnaissance started before the summer break precisely in view of the presentation of the budget law. Which will also be the focus of the majority summit on Friday 30 August, when the first Council of Ministers has already been scheduled to resume work.

Perimeter defined by 10 September

The document envisaged by the new EU Stability Pact, which will contain the new planning framework (absent in the April Def) and which will in fact replace the Nadef, as the Mef explained in a note, will be approved in the Council of Ministers by mid-September in order to deliver the document to Brussels and Parliament on time. At that point the perimeter of the manoeuvre will be defined.

Family, facilities also for self-employed mothers

The manoeuvre, as it would seem to emerge from the latest indications of the technicians, seems destined to introduce some novelties, important ones, on the family front. The technicians, for example, are considering the possibility of redefining the single allowance instrument by calibrating it better, also because the resources earmarked for 2024 would not be used in full. The lower expenditure to be incurred, together with a slice of the approximately 2 billion savings from a more limited use of the inclusion income compared to the initial forecasts, would be reused on other instruments. Among Palazzo Chigi's priorities would be to extend the current benefits for working mothers, guaranteeing them not only to 'employees' but also to the self-employed.

The resource node

Once again this year there is the resource knot to be unravelled, but this time the resolution of the puzzle is made more arduous both because of the return of the Maastricht rules, albeit reformed, and because Italy is under excessive deficit procedure and would therefore have to cut the structural deficit by at least 0.5% per year for the next seven years, around 10 billion per year. If the measures of the previous manoeuvre and the unavoidable expenditures were to be reconfirmed, the bill would start at over EUR 20 billion. Among the main items, the wedge cut for 14 million workers (10.7 billion) and the amalgamation of the first two Irpef rates (about 4 billion); support for the SEZ weighs in at 1.9 billion; at least 1 billion is needed for international missions; the tax relief for corporate welfare and productivity bonuses is more than 800 million.

The new Irpef tax cut

If the confirmation of the cut in the tax wedge and the three Irpef rates are the Executive's priority to guarantee that benefit in the pay envelope of 1296 euro a year for taxpayers up to 35 thousand euro, the Government's ambition is to go a step further on the implementation of the tax delegation, with a new tax cut for taxpayers who today declare up to 50 thousand euro. The idea relaunched on several occasions by the Deputy Minister for the Economy himself, Maurizio Leo, would be to reduce to 33% with a cut of two percentage points on the current rate of 35%, which today affects the second bracket of the Irpef, i.e. those who declare incomes between 28 thousand and 50 thousand euro.

Meloni torna sui social: "Le estati difficili sono quelle di altri"

Front covers, difficult to recover on tax expenditures

For the coverages the government relies on the spending review, on the appropriations of abolished measures, such as the Ace, and on tax revenues. It is more difficult to recover revenue from the reorganisation of so-called tax expenditures. To date, plans to rationalise rebates, preferential rates, tax credits and deductions would stop at a meagre EUR 400 million.

Ue, via libera alla riforma del Patto di Stabilità

The road to settlement

Then there is the two-year agreement proposed to self-employed persons and companies on income to be declared in 2024 and 2025 with the guarantee of being excluded from controls. In the coming months, the operation will get into full swing and taxpayers, with their intermediaries, will decide whether to join or not. A choice that will have to be made by next 31 October, which is out of time for the balances of the manoeuvre. Expectations among Mef technicians are better and could ensure between 700 million immediately and one billion the second year. In order to push adhesions, in fact, the government has reduced its requests, which in some cases went as far as asking the least reliable taxpayers, far from 8 in the tax report cards, for taxable income even up to 20 times higher than that declared in past years. Instead of the more burdensome Irpef taxation at increasing rates based on income, the solution adopted is to introduce a flat tax on the differential between the accepted proposal for a tax settlement formulated by the tax authorities and the declared income for 2023. A flat tax with increasing rates of 10%, 12% and 15% according to the grade in the tax report cards (more than eight, between six and eight, less than six).

The timing

The resources also include the proceeds from the payment of the last instalments of the 'rottamazione quater' extended to 15 September. It follows that the framework of the coverage will only become clear later on. Appointment, as said, to 10 September when the perimeter of the manoeuvre to be approved as every year by next 31 December will also be defined for the Chambers.