Rome

Govt still trying to avert VAT hike, says industry minister

Saccomanni suggested stopping 1% rise may not be possible

Govt still trying to avert VAT hike, says industry minister

Rome, May 30 - Italian Economy Minister Fabrizio Saccomanni is still trying to avert a 1% rise in value added tax (VAT) scheduled for July even though he suggested this week it may not be possible, Industry Minister Flavio Zanonato said Thursday. Saccomanni said on Tuesday that the government needs "to concentrate on investments" to boost growth and jobs when asked if he would stop a 1% increase in the top band of VAT that will take it from 21% to 22%. But Zanonato said that this does not mean the government has stopped trying to find the money needed to avoid the hike, amid fears it will further hit consumer spending that is already low in Italy after almost two years of recession. The VAT increase was planned by former premier Mario Monti's emergency technocrat administration - which governed from November 2011 until Prime Minister Enrico Letta's executive was sworn in last month - as part of measures aimed at restoring Italy's public finances to health. "It isn't the government's intention to increase VAT, it's something decided by the last government and four billion euros are needed to deactivate it, either from new revenues or cuts or a mix of both," Zanonato said on Italian radio. "Saccomanni is working on it, trying to build a proposal". photo: Economy Minister Fabrizio Saccomanni.

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