The thinking that currently exists in the financial staff is that since 2019 “horizontal” relief measures have been implemented, such as the reduction of ENFIA by 35%, the reduction of insurance contributions by 4.4% (5.4% if we calculate the reduction by 1% in 2025) and the abolition of the special solidarity levy, initially for the private sector from 2021, as a measure against the consequences of the pandemic, and then, for the public sector and pensioners, from 2023.
However, these measures came to relieve the rich, the poor, the salaried and the unemployed. There has also been targeted relief for the economically vulnerable (extending to 2025) and businesses, but not enough has been done for the so-called ‘middle class’, which has lost out on income-based emergency benefits and successive crisis relief.
What do the numbers say?
In the direction of changing the situation, the scenarios have started for the relief of income taxation for incomes from 25,000-30,000 euros up to 50,000 euros. This is given that the taxpayers of this category lose many of the reliefs, remaining the permanent “underbalances” of the budgets in terms of tax revenues. With the “capital” that the fight against tax evasion will create and is expected to exceed 2.5 billion euros by 2026, some targeted interventions through changes in the tax scale are being considered.
The current income tax scale starts from the low rate of 9% for incomes up to 10,000 euros. The tax then escalates to 22% from 10,001 to 20,000 euros, to 28% from 20,001 to 30,000 euros, to 36% from 30,001 to 40,000 euros and to 44% for amounts over 40,000.
In particular, it is being considered to add intermediate factors in order to relieve today’s and tomorrow’s “shareholders” of the middle class. The matter is already under study, the scenarios are running and will start to be finalized from mid-2025, when there will be a clear picture of the course of tax revenues. However, the first samples from the war against tax evasion are impressive, since this year the additional revenues are expected to exceed 2 billion euros.
And other measures
At the same time, the financial staff is also looking for other, smaller-scale measures, such as the provision of a hazard allowance to 80,000 uniformed personnel, the complete abolition of the solidarity fee also for legal entities and the reduction of subsistence allowances, depending always on the course of public revenues.
The latest estimates from the AADE show a steady upward trend in tax revenues, as a result of the increase in incomes, without counting the additional revenues from tax evasion.
All this, while so far for 2025 additional tax and income measures of the order of 1.45 billion euros have already been announced and instituted, which have already been included in the draft budget submitted a few days ago to the Parliament. Additional tax fairness measures have recently been announced with larger increases for the one-off tax payment, with the discount escalating from 2% to as much as 4%, depending on when tax returns are filed. It was also announced the abolition of the trade fee for 25,000 workers with a service invoice and up to three employers. This category was forgotten this year in the 50% reduction that applied to freelancers and the self-employed.
Overtaxation trap
The subsistence allowance burdens approximately 1.5 million taxpayers, the majority of them unemployed, with additional taxes each year. It was a product of the failure of controls by the tax authorities. The digitization of management and controls by AADE provides the safe corridor to proceed with changes such as:
- The amendment to the provisions on the minimum amounts of proof of living of 3,000 euros for unmarried people and 5,000 euros for married or cohabiting couples.
- The elimination of distortions and injustices caused by the determination of taxable income on the basis of living standards, which have been instituted for specific economic sectors.
Today the presumptions, as they are structured, are the biggest additional tax trap for households. However, there are ways that allow taxpayers to escape the presumption and be taxed on the actual income they received. Taxpayers can claim income, loans received, lump sums, allowances to avoid presumptions.
FOR BUSINESS
Complete removal of the end of pretension
The complete abolition of the pretense fee for all around 300,000 legal entities is the next objective of the economic staff, as part of the measures it wants to implement before the next elections in mid-2027.
The gradual abolition of the last purely memorial tax is dictated by the circumstances, since in addition to the private self-employed, it also burdens the largest companies, which continue to be burdened even today with burdens that suspend recruitments that would reduce the unemployment rate.
It is recalled that the fee is 1,000 euros for the central company and 600 euros for each branch.
The possibility for the complete abolition of this fee is provided by the constant outperformance of tax revenues. The abolition of the tax is a requirement of the European Commission, which in its reports has characterized the specific fee as non-proportional, therefore unfair, while at its base it characterizes it as anti-development and counter-productive.
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