There Budget Law it is an act with which every year Parliament authorizes the Government to withdraw and use the public resources (public money) in its administrative activity. In other words, every year, the Government prepares a bill to be approved in Parliament, where it establishes how they will be distributed the sums available and to determine the fiscal policies of the Italian State. All the provisions are put in writing in the Budget Law come in which the State expects to collect during the following year through the taxes (such as VAT, IRPEF, IRES), i social security contributions and other sources of income. The go out instead, it is the money that the State plans to spend on public services (health, education, pensions, infrastructure, etc.), to pay for the debts and for other commitments. The Budget Law in practice thus serves precisely to establish the priority expensesthe possible ones tax changes (through new taxes or concessions) and how any will be addressed economic emergencies.
There Budget Law 2025 it will represent the fundamental document with which the Italian government will establish the economic forecasts and fiscal policy choices for the year 2025.
What is the Budget Law and how does the proposal process work
The Budget Law, developed by the Government, establishes the expected revenues and expenses together with the financial coverage. Let’s summarize the process of proposing the Budget Law:
- Preparation: the bill is prepared by Ministry of Economy and Finance (MEF) and the government, which uses financial experts and economic research institutions to establish revenue and expenditure estimates for the following year. The new budget bill then passes through the competent commissions and is presented to Parliament by 20 October.
- Discussion and approval: The Parliament examines and discusses the project. He can make changes, but must approve it by the end of the year (normally by December 31).
- Execution: Once approved, the law takes effect on January 1st of the following year and the government implements economic policies and planned measures (for example, new taxes, tax breaks, financing of public projects).
- Once in force, the Budget Law is monitored by the competent authorities to ensure that revenues and expenditures comply with established objectives. Furthermore, in some cases, the Budget Law may be subject to changes during the year, to deal with sudden economic changes; these changes are obviously introduced with specific decree-laws.
A look at the 2025 Budget Law
At the moment, the precise details of all the contents of the 2025 Budget Law are not yet available; however, we can predict, based on the laws of previous years, that it will deal with topics such as economic growththe fiscal sustainabilitythe tax reforms they investments in infrastructure And innovation. The Italian government will have to find a balance between supporting the economy and respecting European commitments regarding deficit et al public debt.
The 2025 Budget Law draft, presented by the Government on 23 October 2024, includes the objectives established in the Structural budget plan for the period 2025-2029 (this is a document required by European rules which indicates the trend in net primary spending that nation will have in the following five years). These objectives are in line with the growth rate of net spending which they declare will be equal to 1.3% of GDP in 2025, 1.6% in 2026, 1.9% in 2027, 1.7% in 2028 and 1.5% in 2029 .
The growth rate of net spending is nothing more than an economic measure that indicates how much public spending grows or decreases net of revenues and extraordinary variations. This indicator is useful for monitoring the trend of public finances and comparing the evolution of spending between different periods or between different countries.
Why do we also hear about the Financial Law and the Stability Law?
Briefly we can say that the Financial Law it was an annual law that established the economic resources available to the State and defined the fiscal policy for the following year, which was then replaced by Stability Lawwith the intention precisely of establishing economic priorities and changes to taxes, but not limiting itself only to budget management, thus also including provisions on economic and fiscal matters.
Starting from 2016, the Finance Law and the Stability Law have been “absorbed” into the Budget Law (actually at different times, but from 2016 onwards only the Budget Law has been included). With this reform, the Italian regulatory system has tried to simplify economic and financial planning.
