ROME: The Italian National Statistical Office shows an increase in the Government’s fiscal deficit in 2014 despite a further significant rise in the tax burden relative to the size of the economy.
In 2014, the Italian budget deficit was three percent of gross domestic product (GDP), some 0.1 percent more than in 2013, while the overall tax ratio also rose by 0.1 percent over the year to 43.5 percent of GDP.
In the fourth quarter, the tax-to-GDP ratio reached 50.3 percent, up 0.1 percent against the same period of last year, while the ratio of total government revenue-to-GDP reached 55.3 percent, up 0.5 percent.
Italy’s Ministry of the Economy and Finance has issued a response to the statistics, pre-empting criticism that the Government has not reduced tax burdens as it had promised. It pointed out that last year’s EUR80 (USD88) monthly individual income tax bonus has been classified by Istat as a tax expenditure, rather than as “less tax and more money in pay checks.”
If it had been classified as what it is: a reduction of tax on employees,” effective tax burdens in 2014 “would have been estimated at 43.1 percent of GDP, a fall from the 43.4 percent seen in 2013 and 43.5 percent in 2012,” it said.
