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Italy's tax burden reaches record height: study

Enlarge  Narrow Add Date:2014-01-09   Source:Xinhua NetViews:11084

ROME, Jan. 7 (Xinhua) -- The tax burden in Italy reached a record 44.3 percent in 2013, a study by the business association Confcommercio said on 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, Confcommercio said.

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.

Again last week, Italy's Economy Minister Fabrizio Saccomanni said that a sharp lowering of the spread between the yields for Italian government bonds and the benchmark Deutsche bunds from Germany will free up resources for reducing the tax burden.

For the first time since July 2011, the spread, which is seen as a fluid measure of the economy's health, fell below the psychologically important threshold of 200 points last week.

However, Confcommercio pointed out that, in 2013 "no process of tax burden reduction was started in Italy," while there was only "a partial redistribution among the different categories of taxpayers."

The study also 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."

Also on Tuesday, local reports said the bomb squad was called to remove a live hand grenade which was found at the entrance of a tax-collection office in the northwestern town of Chivasso.

It was the latest in a series of similar episodes occurred at the Italian tax offices, which have been a repeated target for bomb scares during the country's longest postwar recession.
 
 

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