As Italy heads to the polls on March 4, the former Prime Minister Silvio Berlusconi is promising a series of tax cuts.
Should Forza Italia return at the helm of Italy, Berlusconi promises to cut car, homes, and inheritance tax. The model he is proposing is a 23% flat tax rate for both businesses and individual incomes. This should be gradually reduced to 15%.
The proposal is included in a 10-point pact agreed between Berlusconi and his far-right allies, Lega Nord and the Brothers of Italy.
As the Italian economy is rebounding, the hated tax on primary homes has already been removed. However, given that Italy’s debt-to-GDP ratio remains the biggest in the EU after Greece – and by far the biggest in absolute terms – the promises of the centre-right have been criticized as “irresponsible,” with the former Prime Minister Mario Monti leading the chorus of critics.
Across the political spectrum, all parties are promising to renegotiate the EU’s fiscal compact. The Berlusconi-led alliance is also calling for “less restraint by Europe,” while the 81-year old veteran has also called for a parallel currency for domestic transactions.
The right-wing alliance currently leads the polls, although the single biggest party is the Five Star Movement (MS5).