June 5, 2019 / 8:02 AM / 4 months ago

Italy's League says will scrap Renzi's 80-euro 'bonus' in tax reform

ROME (Reuters) - Italy’s ruling League party will scrap an 80-euro ($90) per month hand-out for low-earners as part of a sweeping simplification of the tax system it plans to adopt in next year’s budget, the party’s economics chief said.

The fiscal give-away was introduced in 2014 by former center-left prime minister Matteo Renzi.

Claudio Borghi, told Reuters his party’s plan to reduce income tax rates and the number of tax brackets would be partly funded by scrapping what is often referred to as “Renzi’s bonus”.

The League, which governs with the anti-establishment 5-Star Movement, has always made tax cuts one of its priorities, but Borghi said its “flat-tax” project would not necessarily cause a plunge in revenues, and it was mainly about simplification.

“We can get there gradually, and the point is that the aim is to simplify the system. It’s not a gift or a windfall,” he said.

“It will involve the disappearance of tax loopholes, tax brackets, tax breaks and the 80 euros,” he said, in reference to Renzi’s measure, adding that in the end the net result would be that Italians had more cash in their pockets.

Reporting by Gavin Jones

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