UPDATE 1-Italy to cut 3.6 bln euros in taxes this year

Thu Nov 12, 2009 7:11pm GMT
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(Recasts after comments from Berlusconi spokesman)

ROME, Nov 12 (Reuters) - Italy's cabinet approved on Thursday a decree to cut 3.6 billion euros from income and business taxes this year, allowing contributors to postpone payments until 2010, a government spokesman said.

The tax cut, aimed at stimulating Italy's economy as it emerges from its worst post-war recession, will apply to income tax on individuals (Irpef), Paolo Bonaiuti, the spokesman for Prime Minister Silvio Berlusconi, said.

Bonaiuti contradicted earlier comments from officials who had said the measure would also involve the corporate tax Ires and a regional business tax called Irap.

"To be precise the measure approved by the cabinet today involves only a cut of Irpef worth 3.6 billion euros," he said.

Some confusion persisted, however, as the official cabinet statement released more than four hours after the end of the meeting, much later than usual, only made vague reference to "a law decree on the postponement of downpayments on tax."

It did not contain any figures.

Italians normally make a downpayment on taxes in November and pay the balance in mid-year.

A government source told Reuters that Economy Minister Giulio Tremonti had blocked requests by other ministers for the cancellation of the downpayment to be more broadly applied.  Continued...

 
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