Tax and social security contributions

Tax contribution

The reduction of tax and social security contributions are some of the objectives which the government is working on. But just as intervention of the “tax wedge” is being structured, which should have an impact of about 5 billion on public spending, it hasn’t yet fulfilled these goals. This is the opinion of Stefano Trifirò lawyer at Studio Trifirò & Partners. The fact that the tax wedge can “take place through a tax credit, or a direct cut in the contributions paid by workers (currently around 9%) changes little, given the objective of increasing payroll and as a result, to boost consumption” explains Trifirò. “The government should actually rationalize and rebalance the system of social safety nets, to protect even the most sensitive categories. To do so, the only way is to reduce the tax burden on businesses and labour costs, attracting foreign investors and encouraging local entrepreneurship. The prerequisite for implementing effective tax policies of this type is the cutting of unproductive public spending, keeping the costs of the social security system under control, including those for social safety nets,” the lawyer continues. “A purpose which the recent budget draft does not pursue. The project of the new government is not a structural reduction of the true tax wedge to be understood as the cost of labour, but of that part of the wedge only for workers. The effect being that the tax burden on business and labour costs would remain unchanged. On the other hand, the reduction of tax and social security contributions should be equally divided between employers and workers. So to have on one side a reduction of the fiscal pressure with a revival of production and on the other greater liquidity with an increase in demand. Thus, setting in motion a virtuous circle that concerns both production and consumption.” The lawyer reiterates that “the current trend is instead focusing on direct support measures in favour of subordinate workers, such as citizenship income and quota 100, when it should instead give way to measures that identify as self-employment and quasi-subordinate of valid alternatives to promote greater flexibility in the management of these relationships. Furthermore, facilitating self-employment especially for those who have lost their permanent job, would be a way to try to stem forms of exploitation, such as illegal employment or the abuse of vouchers.” Barbara Millucci

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