Bank of Italy takes issue with aspects of budget bill – Politics

Fabrizio Balassone, the Deputy Head of
the Bank of Italy’s Economics and Statistics Department,
expressed reservations about several aspects of the government’s
2026 budget bill during a parliamentary hearing on Thursday.

   
These included the ‘rottamazione’ (demolition) mechanism to
incentivize people to settle tax disputes and measures to raise
over four billion euros in additional revenue from banks and
insurers.

   
Balassone also said the budget, which cuts the second band of
the Irpef income tax for earnings of between 28,000 and 50,000
euros from a 35% tax rate to 33%, does little to reduce income
inequality in Italy.

   
He said that overall, the measures of the budget “will not lead
to significant changes in inequality in the distribution of
disposable income among households.”
He said the reduction of the Irpef rate favours households in
the top two-fifths in terms of income.

   
When asked about the tax-dispute ‘demolition’, he said such
operations in the past have not boosted the “effectiveness of
revenue recovery” and stressed that “tax evasion, as is well
known, damages growth and produces inequity, disadvantaging
honest businesses and citizens”.

   
When referring to the measures being imposed on banks and
insurers, Balassone said that “in general, it would be advisable
to avoid the frequent recurrence of unexpected changes in
taxation.”

   

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