Reduction of Irpef rates and cutting the wedge: here is the Government’s plan for 2025

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The programmatic framework is not included in the newly approved Def. In essence, the Government is taking its time and will only define in September whether and where to intervene with the next budget law, starting however from a fixed point reiterated by the Minister of Economy, Giancarlo Giorgetti : the cut in the contribution wedge will also be repeated in 2025. Where can we also find the resources to confirm the other key measure of the 2024 budget, i.e. the three-rate Irpef?

Another 10 billion are needed for the decontribution

For Minister Giorgetti, the measure which provides for a 7% cut in social security contributions for incomes up to 25 thousand euros, and 6% for incomes up to 35 thousand euros, financed for just one year (also in deficit) is the “the real objective that we will set ourselves when we define the structural program”.

Therefore by 20 September, when the Government (once it has received the so-called “technical trajectory” in June) presents the multi-year spending plan in Brussels in compliance with the new European budget rules, it will have to indicate where to find the 10 billion that will be used to finance the measure so as to include it in the budget law.

The mix of interventions

The margins are quite narrow and at the moment a mix of interventions can be envisaged. On the one hand, the margins of flexibility that will be possible during negotiations with the European Commission.

If the obligation to reduce the debt by at least 1% in the infringement procedure for excessive deficit is not met, the negotiation will focus on the size of the “discount” that will be possible to obtain compared to the requested 0.5% cut in the structural deficit .