The 2025 budget bill was approved by the Italian Chamber of Deputies on December 21 and is currently under review by the Senate for final approval. The budget aligns with the government's serious and responsible approach to economic measures amidst a challenging global context influenced by the ongoing Russia-Ukraine conflict and the worsening crisis in the Middle East.
The bill emphasizes reducing tax pressure and supporting middle-low income workers and retirees. It includes resources for renewing public administration contracts, refinancing the national health fund, supporting large families, and incentivizing childbirth.
Key Measures in the 2025 Budget Bill
Support for Middle-Low Income
The tax wedge cut for middle-low income earners has been confirmed and made structural, extending benefits to incomes up to €40,000, impacting an additional 3 million taxpayers. The new budget maintains a contribution cut for incomes up to €20,000, while those between €20,000 and €40,000 will receive a fixed deduction of €1,000, gradually decreasing to zero between €32,000 and €40,000.
IRPEF Tax Rate Revision
The revision of IRPEF tax rates into three brackets has also been confirmed, applying a 23% rate to taxable incomes up to €28,000 instead of €15,000. Together, these measures are expected to result in an annual impact of approximately €18 billion.
Family Support Initiatives
A €1,000 bonus will be introduced for each child born or adopted starting January 2025, targeted at families with an ISEE not exceeding €40,000 annually. Parental leave will be extended to three months compensated at 80% within the child's first six years.
Tax Deductions and Contributions
Tax deductions for private school expenses will increase to €1,000. Additionally, a contribution exemption for working mothers will be confirmed for both fixed-term and self-employed workers.
Healthcare and Pension Measures
The budget allocates additional resources for the national health service, increasing funding from €136.5 billion in 2025 to €141.3 billion by 2027. Pension increases of 2.2% in 2025 and 1.3% in 2026 are also planned.
Employment and Investment Support
Tax incentives for new permanent hires will be extended, along with a 30% contribution for energy-efficient appliance purchases. The budget also includes measures aimed at supporting investments in the southern regions of Italy.
The 2025 budget bill is available for review on the 'Bilancio Aperto' app for smartphones and tablets.