ROME, Dec 1 (Reuters) - Italy is considering increasing by
some 2 billion euros ($2.27 billion) funds set aside to curb
energy prices next year, using resources previously planned to
cut income and business taxes, three government sources said.
With international energy prices soaring, Mario Draghi's
government has already spent more than 4 billion euros this year
to try to rein in utility bills by compensating companies that
agree to cap their tariffs.
Draghi set aside a further 2 billion euros for next year in
the 2022 budget approved by cabinet in October, but with energy
cost pressures continuing to drive consumer price inflation, the
government is now considering doubling that sum.
The money can be found because the government will use less
than the 8 billion euros earmarked in the budget to cut income
and business taxes, the sources said, asking not to be named
because of the sensitivity of the matter.
With the Treasury aiming to trim the budget deficit to 5.6%
of gross domestic product in 2022 from the 9.4% targeted this
year, resources are limited.
The cabinet is likely to discuss the matter on Friday, one
of the sources said.
The tax cut will focus mainly on income tax (IRPEF),
reducing the number of tax rates to four from five, with the
largest benefit going to middle-income tax-payers earning
between 28,000 and 55,000 euros per year.
According to a preliminary deal reached among the ruling
parties, the first tax band on annual income between 8,000 and
15,000 euros will be left at 23%. The second band, between
15,000 and 28,000 euros, will be lowered to 25% from 27%.
The third band, on income from 28,000 to 55,000 euros will
get a more substantial cut to 35% from 38%.
The fourth band, on income from 55,000 to 75,000 euros will
rise from 41% to 43%. This is the rate that is currently applied
on income above 75,000 euros, effectively cancelling the fifth
income tax band.
Draghi has been meeting delegations this week from parties
in his national unity coalition to hammer out the details of the
($1 = 0.8828 euros)
(Editing by Kirsten Donovan)