Italy’s tax burden reaches record high: Study

Rome, Jan 8: The tax burden in Italy reached a record 44.3 percent in 2013, a study by the business association Confcommercio said Tuesday.

Last year, the combined burden of taxes and social security contributions rose by 1.6 billion euros over 2012, while nominal gross domestic product (GDP) fell by over 8.7 billion euros, Xinhua quoted Confcommercio as saying in a study.

The association called for “greater courage and incisiveness in public spending cuts and, especially, supply-side tax policies starting from an incisive reduction of the tax burden which weighs on production factors, above all employment”.

Tax burden reduction should be the “priority and undeniable action” of Italy’s government in the near future, which would be “the only way to re-launch the vital productive forces present in the country,” the study noted.

Italian Prime Minister Enrico Letta has repeatedly said his left-right coalition government was working to find more resources from its spending review and from a crack-down on tax evasion to reduce the tax burden, especially on workers.

The study estimated the combined burden of taxes and social security contributions will remain above 44.2 percent this year too, which was making the fall predicted by the government “illusory”.

The government expected the tax burden to be 44.2 percent in 2014, compatible with a real GDP growth of 1 percent, which, according to Confcommercio, “will not be easy to achieve in the current economic conditions of the country.”

IANS