The 2027 Budget is being examined by Parliament and between one hearing and another some critical issues emerge. Various actors are pushing for reflection on some measures, the request for different resources or the lack of funds for sectors that “do not seem to be a priority”. Lilia Cavallari, president of the Parliamentary Budget Office, holds this opinion.
For Cavallari, the maneuver is characterized by an approach consistent with public finance commitments and the rules of the European Union, helping to preserve the stability of the accounts. He adds a “but”, namely that to do so, fragmented interventions are supported, dispersing resources and thus limiting the ability to address the structural problems of the Italian economy. The Parliamentary Budget Office does not reject the objectives of the Budget, but the approach.
Irpef cut: benefit not for everyone
Cavallari analyzed the most relevant interventions of the 2027 budget step by step. He started with the cut in personal income tax up to 55,000 euros. According to estimates by the Parliamentary Budget Office, this will affect 3.25 million taxpayers, 8% of the total, reducing revenue by 1.45 billion euros.
The question is who will really benefit from this benefit and the answer is:
- 89% of managers (444 euros on average);
- 12% of employees (52 euros);
- 1% of workers (4 euros).
He adds:
Young people up to 35 years of age are effectively excluded and in the South the average benefit is less than half that in the Centre-North. The interventions on the taxation of personal income reduce the levy for specific categories of taxpayers, but do not address the structural criticalities of the Irpef, on the contrary they accentuate them.
Healthcare at risk
The passage on healthcare is also critical. According to the PBO analysis, the financing of the National Health Service will go from 142.9 billion euros in 2026 to 146.3 billion in 2027, therefore with an increase of +2.4%. The incidence of health spending on GDP will decrease from 6.1% in 2027 to 5.8% in 2029, while current national accounting health spending will remain stable at 6.4% of GDP.
The destination of additional resources is of concern, a portion of which has already been absorbed by the defined interventions and by the automatic adjustment of spending rights. The margin actually available to the Regions will be equal to only 138 million euros in 2027, approximately 6% of the increase in ordinary financing.
Regarding the 300 euro card, the PBO recognizes the importance of the intervention, but also highlights the critical issues of beneficiary selection criteria based on age and pension income.
Criticisms of substitute taxes and stamp duty exemption
Two other critical points touched upon by the PBO analysis concern substitute taxes on salary increases and exemption from car tax.
Regarding substitute taxes, Cavallari explains that the 5% tax does not affect deductions and bonuses, while the 1% tax for young workers hides a pitfall: a young person with 15,000 euros of income and a 3.5% increase can pay an effective levy of around 30% on the increase, far from the nominal 1%.
Another very expensive measure is the exemption from car tax only for some vehicles. The exemption will concern 63% of families and is worth 0.9% of the spending of the less well-off ones, compared to 0.1% of the richer ones.
For Cavallari it was an opportunity to review a tax linked to the power of the vehicle and not to its use, value or emissions.
