Rome

Italy's Stability Law passes the House, goes to Senate

Budget-reform bill introduces Tobin Tax, raises VAT

Italy's Stability Law passes the House, goes to Senate

Rome, November 22 - The government's budget-reform bill known as the Stability Law passed the House Thursday with 372 ayes, 73 nays and 16 abstentions. The bill, which first passed three confidence votes, now passes to the Senate. Before it was approved, MPs were able to tack on two provisos, one requiring the government to promote the Italian language abroad, and another requiring them to "consider broadening the base on taxable income" for the Tobin Tax, which applies to investment transactions and is predicted to bring in 1.1 billion euros. The Tobin Tax is also expected to reduce the volume of stock and derivatives transactions by 30% and 80% respectively. The bill's other provisions include increasing VAT by 1% starting in the second half of 2013 for the VAT sales bracket of 21%, and a retroactive reduction of tax deductions, making it necessary for taxpayers or tax-paying entities to cough up payments on past filings. Premier Mario Monti has said that the budget measures contained in the Stability Law do not amount to another austerity package like the tax hikes and spending cuts his emergency government passed last year to put Italy on course to balancing its budget in structural terms next year.

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