Rome

Industry minister calls to lower tax burden for companies

'Consumers scared off by changing fiscal rules'

Industry minister calls to lower tax burden for companies

Rome, May 9 - Italy's tax burden needs to be lowered for businesses, Industry Minister Flavio Zanonato told a meeting of Rete Imprese Italia (Italy Companies Network) on Thursday. "Fiscal reduction is indispensable for companies and for this reason a serious and effective program is necessary without compromising the stability of public finances," Zanonato said. The industry minister in the new left-right Italian government also said that a priority to relaunch consumption was to "intervene with fiscal policies" and stop changing fiscal rules as "this constant evolution of tax regimes creates uncertainty and scares the consumer". Resources recuperated from rampant tax evasion in the country "should also be employed to relaunch growth and employment as a priority," Zanonato added. Italy's tax burden in 2011 was the second-heaviest among the 27 countries in the European Union after Belgium, according to the most recent data released by Eurostat in April. The country's overall burden at 44% of GDP is some 3% higher than in other EU countries, the Bank of Italy said last month. Zanonato cited as priorities to boost growth credit policies, measures tackling energy costs, red tape and liberalizations, and warned that businesses would also be encouraged to invest, innovate and become international. He also spoke about the late payment of public-sector debt to private companies. "We need to make sure that these resources are paid off to companies quickly," he said. However, he warned the government needed to avoid solutions which would be difficult to implement and have too big an impact on public debt. The reluctance of credit institutions to issue loans has been compounded by delays within Italy's public administration in repaying its debt to private companies. The former government of technocrat premier Mario Monti tried to address the problem in April with a decree authorizing the release of 40 billion euros for the repayment of public-administration debts to the private sector. The number of bankruptcies has doubled in five years, according to Italian business union Confindustria. There were 3,596 bankruptcies in the fourth quarter of 2012 compared to around 1,800 over the same period in 2007.

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