In the future, personal income between 28,000 and 50,000 euros will be taxed at 35% in Italy, compared to 38% currently.
Income taxes between 15,000 and 28,000 euros will be reduced from 27% to 25%.
The 41% tax bracket for income between 55,000 and 75,000 euros will be completely abolished, with all income over 50,000 euros now to be taxed at the maximum rate of 43%.
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Annual income below 15,000 euros will continue to be taxed at 23%.
The agreement was reached following negotiations between the Italian Minister of the Economy Daniele Franco and representatives of the majority parties of the Italian government on the distribution of the tax reduction of 8 billion euros provided for in the law of finances 2022.
Under the agreement, around â¬ 7 billion will be spent on overhauling Italy’s personal income tax, or âIRPEFâ, through these reforms.
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The remaining billion will be used to eliminate the regional tax on production “IRAP” on sole proprietorships and self-employed workers.
The so-called âRenzi Bonusâ, introduced by the former Italian Prime Minister Matteo Renzi in 2014, which initially granted a tax bonus of 80 euros and then 100 euros to low wages, will be completely abolished.
Tax experts estimate that the reforms should result in average annual savings of 100 euros for those with an annual salary of 20,000 euros; 300 euros for those who earn 30,000 euros per year, and around 600 for those who earn 40,000 euros per year, according to the Italian daily news Corriere della Sera.