Mario Draghi approves 2022 tax cut budget

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Sharjah 24 – AFP: The Italian Senate has adopted the 2022 budget, the first in Prime Minister Mario Draghi’s coalition, cutting taxes to help the Covid-stricken economy and low-income people.
Presented in October, the budget was approved by the upper house on the night of Thursday to Friday with 215 votes, 16 against and no abstentions.

It must now be adopted by the Chamber of Deputies before the end of the year.

The main beneficiaries “are employees and retirees with little income and resources,” Draghi, former director of the European Central Bank, told reporters.

Italy was the first country in the EU to experience a major outbreak of Covid-19 in early 2020.

A whopping 32 billion euros ($ 36 billion) has been set aside to jumpstart the economy and support struggling businesses and families amid an increase in coronavirus cases.

Income tax brackets have been reduced to four categories instead of the current five, with tax exemptions for those with lower wages.

The biggest benefits will be for people in the third bracket – or earning annual salaries between 28,000 euros and 50,000 euros – whose tax rates will drop from 38% to 35%.

Conversely, the tax rate for people receiving 50,000 euros and more will drop from 41% to 43%, the highest rate, which was previously applicable to income above 75,000 euros.

The budget also exempted some 835,000 entrepreneurs from paying a regional tax for independent businesses and set aside 3.8 billion euros in 2022 to help households cope with rising energy costs.

“We are ready to add additional resources if the price spiral does not stabilize,” Draghi said.

The Italian leader said this week the country “has reached the 51 targets” needed to qualify for the next tranche of almost € 200 billion allocated to Italy under the EU’s post-virus fund .

Brussels demanded reforms in return for grants and loans, including an overhaul of the justice system, one of the least effective in Europe, and a reform aimed at regularizing real estate.

Rome received its first check in August for € 24.9 billion from the European Commission, or 13% of the total funds expected from Brussels over six years.

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