Labour cost in Italy: tax breaks… to” virtuous companies” only

by Nathania Zevi

Speaking at the Rimini Meeting, Italian Labour Minister Elsa Fornero said that the government could reduce the tax burden on labour cost in the country.

Minister Fornero specified that the government could propose cutting labour tax to “ companies that make the best use of their human capital, enhance worker- training programs, and do not discriminate.”

As a matter of fact, Minister Fornero’s proposal is not so easy to be put into effect in the short term.

Companies will have to demonstrate that they deserve tax reductions.  Only after the material sent will be submitted to a sort of evaluation process regarding personnel management.

Nevertheless, even by reducing burocracy and fastening all procedures, it is clear that obtaining labour tax reduction will take time.

Furthermore tax reductions might have very little impact on Italians’ finances, as Minister of Economy, Vittorio Grilli,  has recently said.

The chance of a reduction of IRPEF tax ( Income tax ), a real burden on salaries of Italian citizens, seems to be fading away those days.

An Irpef cut might affect seriously the State revenues.

In this scenario, to Minister Fornero, cutting labour costs might turn out to be even more difficult than the recent and disputed labour reform she has just achieved to get approved.