New measures for families and birth rates , the promised income tax cut for the middle class, €2 billion to boost wages, measures for businesses, and resources for healthcare . And then a new Scrapping Scheme that won't be a "pardon" for the smartest. The retirement age will rise, albeit gradually, starting in 2027. All of this will be covered by cuts to ministries, a rescheduling of the National Recovery and Resilience Plan (NRRP), and the "significant contribution" of banks and insurance companies.

The 18.7 billion euro budget approved today in the Council of Ministers is "very serious and balanced" : this is the summary of the Prime Minister Giorgia Meloni , who presented it Joined at the press conference by Deputy Prime Ministers Antonio Tajani and Matteo Salvini, she thanked the ministers for their "teamwork" and the banks for their "unprecedented willingness." The solution found is a mix of structural and cyclical measures, including a preferential 27.5% rate for releasing reserves, which is currently optional but will later increase—and this is the lever the government is using to push for compliance—and a 2-point increase in IRAP . Overall, these measures are "absorbable" by the system, assures Economy Minister Giancarlo Giorgetti, who fears no "backlash" and expects a "system-wide effort."

Here are the main measures of the budget law approved today by the Council of Ministers:

WAGES AND INCOME TAX : Reduce taxes on earned income. The government is once again taking action on income tax, this year reducing the tax bracket for incomes between €28,000 and €50,000 from 35% to 33%. This advantage will be eliminated for incomes above €200,000. The government's goal, furthermore, is to encourage wages to adjust to the cost of living, so contractual pay raises will be taxed at 5%, but only—this is the new measure announced at the end of the Council of Ministers—for incomes up to €28,000, for 2025 and 2026. Lower rates will also apply to holiday and night shifts. Taxation on productivity bonuses up to €5,000 will be reduced from 5% to 1%.

PENSIONS : Hard-working and physically demanding workers will be excluded from the retirement age increase that comes into effect in 2027. For all others, the increase will be one month in the first year and another two from 2028. A new measure is also planned for the lowest pensions: the "minimum" ones will increase by approximately 20 euros per month.

SCRAPPING : The fifth tax amnesty is here, with payment terms of up to 9 years, consisting of 54 bimonthly installments of the same amount . The new "tax amnesty" will be open to all those who have filed but not paid their taxes. Currently, no minimum initial installment has been established: the idea was to set it at €100, but this was shelved. The benefit lapses after two unpaid installments, but with a more punitive mechanism than the previous one: no more installments in this case, the entire payment is made in a single solution.

HOME AND FAMILY : A tax "contribution" has emerged for separated parents experiencing housing difficulties . To encourage the use of welfare benefits, the primary residence will be excluded from the ISEE calculation, up to a cadastral value expected to be around €92,000. Building bonuses have been confirmed: deductions for renovation work remain at 50% for primary residences and 36% for secondary residences . The bonus for working mothers with an ISEE ceiling of €40,000 and at least two children will increase from €40 to €60 per month . This year, another change could affect the tax deduction system, also benefiting those with only one child. Finally, the extension of optional parental leave is expected to be confirmed: the benefit would be 80% of salary for three months. Special funds will be established to reform the care and assistance role of family caregivers. Finally, the Dedicata a te card is being refinanced: intended for the purchase of basic food items for families with an ISEE (Income and Social Security) of no more than €15,000 (worth €500,000). There is currently no option for the book bonus.

BUSINESSES : A €4 billion investment initiative will begin in 2026 to encourage corporate investment. This will be achieved through the reintroduction of the so-called super-depreciation measure. Businesses will thus be able to depreciate 180% of investments in innovation and 220% of expenses for the ecological transition, which enable the reduction of energy consumption. The measure already has a name: "New Transition 5.0." A tax credit is also planned for businesses located in Special Economic Zones (ZES). The government has assured that the total resources could even increase. Development contracts and the "New Sabatini" tax are also being funded. Finally, another extension has been granted for the plastic and sugar taxes: the new deadline is set for December 31, 2026.

BANKS AND INSURERS: After a long back-and-forth, the government has agreed on a mix of "structural and cyclical" measures. Credit institutions will be able to decide whether to "release capital reserves" under the 2023 law, paying a tax cut from 40% to 27.5%. Also coming are "an increase in IRAP (regional business tax), a new deductibility regime for doubtful debts spread over multiple financial years, and a limitation on the tax carry-forward of losses." Insurance companies will also contribute. In total, the financial and insurance sectors will provide €4.4 billion in funding for the budget next year, for a total of €11 billion over the three-year period.

CUTS, NRRP, CIGARETTES, AND FUEL EXCISE DUTY : New spending review for ministries totaling €2.3 billion next year, rising to approximately €3 billion in 2028. However, the restructuring of the NRRP is the primary funding item in the budget law: it will account for 0.22% of GDP next year, equal to approximately €5 billion. Finally, increased tobacco prices are also being used to raise funds : the cost of cigarettes will rise, but "only slightly," Economy Minister Giancarlo Giorgetti assures. An acceleration in the alignment of diesel and gasoline excise duties is also expected.

(Unioneonline)

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