The government is preparing the next Budget Law, and among its priorities is tax relief on wages. Proposals range from cutting personal income tax (Irpef) for middle- to upper-income brackets to reducing or removing taxes on year-end bonuses (the 13th month’s salary), overtime, and holiday work. Deputy Prime Minister Antonio Tajani, speaking at an Assolombarda event, raised the possibility of lowering taxes on the thirteenth month's salary: "It might sound like a hazardous proposal, but why not? Let's see what we can do". Such a proposal would have a substantial impact, given that the thirteenth month's wage is valued more than €59 billion and provides over €14.5 billion in revenue for the state. Also on the table is a reduction in the personal income tax rate from 35% to 33% for incomes between €28,000 and €50,000, with the possibility of increasing to €60,000. Other recommendations include incentives for renewing expired contracts and a preferential tax rate for the lowest wages, which range between €7.50 and €9 per hour. An expansion of the current 5% flat tax on productivity bonuses is also under consideration. The goal is twofold: to raise workers' net pay and to provide firms more flexibility during peak production periods. However, where to find the needed funds remains unclear. Economy Minister Giancarlo Giorgetti has highlighted that priorities must be considered alongside defense and security spending, as well as responsibilities to NATO and the new European laws. The key question will be whether public finances can support such costly initiatives without endangering the goal of reducing the deficit to less than 3%.
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