ROME (Reuters) - Italy’s centre-right government won a confidence vote on Wednesday in the Chamber of Deputies on its austerity plan aimed at stemming a debt crisis that is undermining the euro zone.
The package, which aims to balance the budget by 2013, has been radically overhauled on several occasions during its passage through the parliament, under pressure from the European Central Bank and Italy’s European Union partners.
Austerity measures are projected to lower the deficit by 54.2 billion euros (46.8 billion pounds) by 2014, according to the Italian Treasury.
Of the deficit cuts to be found in 2012, 4 billion will come from tax and welfare measures still to be drawn up, and the same applies to 12 billion euros for 2013 and 20 billion for 2014.
The budget deficit is now targeted to fall to 1.4 percent of gross domestic product in 2012 from 3.8 percent this year, and to be eliminated in 2013.
Here are some of the main measures in the plan after the latest revisions, with the government’s savings and revenue estimates where available.
* Cuts to the budgets of central government ministries, worth a total of 6 bln euros in 2012 and 2.5 bln in 2013.
* Funding to town councils, regions and provinces reduced by 4.2 bln euros in 2012 and 3.2 bln in 2013.
* Payouts from retirement funds for public sector employees to be held back by up to two years. Expected net gains 330 mln euros in 2012 and 1.065 bln euros in 2013.
* The merging of town councils in towns with less than 1,000 inhabitants.
* A progressive increase in the retirement age of women in the private sector to 65 from 60 to begin in 2014, instead of 2020 as previously planned.
* Delayed retirement for teachers, bringing savings of 100 million euros in 2012 and 1.031 billion in 2013.
* The 20 percent value added tax bracket to be increased to 21 percent, generating an estimated 4 billion euros a year. Affects consumer goods apart from basic food items, books and newspapers, bars and restaurants.
* Tax rate on income from investments raised to 20 percent from 12.5 percent, except for government bonds held until maturity, which remain taxed at 12.5 percent. Tax rate on bank account interest lowered from 27 percent to 20 percent. Expected net additional revenues are 1.494 bln euros in 2012, 1.724 bln euros in 2013, 1.942 bln euros in 2014, and 1.942 bln euros in 2015.
* So-called “Robin Hood” supplementary tax on energy companies raised to 10.5 percent from 6.5 percent and applied to companies with revenue over a threshold of 10 million euros, lowered from 25 million euros. Tax extended to energy network companies and renewables.
Expected net additional revenues 1.800 bln euros in 2012, 900 mln euros in 2013 and 900 mln euros in 2014.
* Higher taxation of lotteries and betting games and higher excise duties on tobacco, to raise no less than 1.5 billion euros from 2012.
* To curb tax evasion, receipt of any payment in cash worth more than 2,500 euros must be communicated immediately to the tax authorities.
There will also be tougher penalties, such as suspension from professional bodies, for failure to issue receipts and invoices, and the possibility of prison sentences for those convicted of evading more than 3 million euros. Other measures against tax evasion include a crackdown on bogus companies used as a front for tax fraud.
Extra powers and incentives will be given to town councils to help unearth tax dodgers.
* Special 3 percent levy to be imposed on incomes of 300,000 euros and above. Measure affects some 34,000 people.
* Stamp duty of 2 percent on sums transferred abroad through money transfer agencies and other financial intermediaries.
New private contracts will be able to include some exceptions to collective national agreements, including to an article which protects the jobs of employees in companies with more than 15 members of staff. Anti-discrimination rules, such as a rule that protects women from being made redundant because of pregnancy, will remain in force.
Government to approve a draft bill to insert a “Golden Rule” on balanced budgets into the constitution, as well as plans to abolish the provinces, whose functions will be assumed by the regions.
Under the balanced budget amendment, governments will be prevented from running a budget deficit from 2014 unless an exception is sanctioned by a vote in parliament.
However, these constitutional amendments will involve a long and complicated procedure that is unlikely to be completed in the current government’s term of office.
Reporting by Gavin Jones, Giuseppe Fonte and Catherine Hornby; Editing by Roger Atwood