Tax system: reform moves forward – Giorgetti pushes for full implementation

The season of tax reforms is far from over. Just as the deadline for the initial implementation of the guidelines contained in the tax authorisation bill is approaching, the Ministry of the Economy has issued a clear signal that the matter is not yet settled for those areas which can still be explored in greater depth and developed further. ‘To complete the tax reform by enacting implementing measures with the aim of simplifying tax compliance, reducing the administrative burden on taxpayers and promoting a tax system geared towards growth’. This is one of the messages contained in the policy document setting out the political priorities for 2027, signed by the Minister for the Economy, Giancarlo Giorgetti.

A measure that does not merely concern the area of taxation but has a broad scope across the policy areas overseen by Via XX Settembre (there are eight priorities, ranging from public finance management to international activities in support of the country’s economic and strategic interests), highlighting the common thread of ‘the creation of public value, in line with the objectives of equitable and sustainable well-being, the 2030 Agenda and the measures set out in the National Recovery and Resilience Plan (PNRR)’, and confirming ‘the commitment to promoting results-oriented governance, capable of responding with transparency, accountability and vision to the challenges of the present and the future’.

The baseline scenario is that outlined in last April’s Public Finance Document (DFP), in which elements of uncertainty arising from developments in the international context remain. This situation is characterised by the effects of the conflict in the Middle East, in response to which the Government has had to intervene on several occasions (most recently last Wednesday) to mitigate the impact of high fuel prices. However, within this context, the Government reaffirms its commitment to safeguarding households’ purchasing power and the competitiveness of the productive sector, whilst continuing to implement measures to support household incomes and business liquidity. The policy document indicates that there will be a continuous review of spending priorities, channelling resources towards the areas of greatest strategic importance to the country. Consequently, the evolution of the macroeconomic landscape and public finances over the next three years appears to be closely linked to developments in global geopolitical tensions.

In such a context, tax policy proves to be a strategic key in various respects, ranging from services to taxpayers to the ability, through audits, to detect tax evasion and avoidance (including at international and EU level) and to promote legal certainty – one of the key drivers of investment, particularly foreign investment. Indeed, in setting out the key points of the chapter, one of the priorities identified is to ‘fully implement the tax reform, monitoring its effects with a view to making any necessary amendments’. In other words, monitoring the ex post impact of the measures to understand where corrective action can be taken. This demonstrates that the tax reform process is by no means over at the end of the 90th minute of play scheduled for the initial implementation, but rather that – despite the end of the parliamentary term – this is a process to be continued, perhaps also to ensure that neither the efforts made so far nor the drive to simplify the Italian tax system are lost. This is another reason why the document encourages improvements to the quality of information sources supporting fiscal policy analysis, including through the use of advanced artificial intelligence (AI) techniques, and, amongst other things, sets out the guidelines for the monitoring and control of tax agencies to ‘improve the services provided to taxpayers and promote compliance at reduced cost’, that is to say, all key areas on which the implementation of the tax delegation has focused decisively. Nor should we overlook the need ‘to strengthen the effectiveness of audits and the recovery of tax revenue, including in the customs, excise and gambling sectors, as well as to optimise the performance of tax litigation, enforced collection and the management of the State’s real estate assets’. The challenges, however, are many, and these include those posed by the use of digital technologies; for this reason, the legislation also aims to ‘strengthen the tax sector’s involvement in the creation of the national cybersecurity ecosystem’.

The priority relating to tax justice is also closely linked to that on taxation. The intention here is to continue the reform of tax justice and tax proceedings, in line with the objectives of the NRRP, aimed at ‘making the tax litigation sector more efficient by rationalising the structures of judicial offices and their staffing levels’. But that is not all: the aim is also to ‘continue efforts to develop IT applications for electronic tax proceedings and to enhance the digital services available to users, in line with technological developments and new provisions on privacy and cybersecurity’.